Financial Markets                      09/15 09:37

   

   NEW YORK (AP) -- U.S. stocks are ticking higher on Monday at the start of a 
week that could show whether Wall Street's record-breaking rally has been 
overdone or prescient.

   The S&P 500 rose 0.4% and was on track to squeak past its latest all-time 
high, which was set last week. The Dow Jones Industrial Average was up 43 
points, or 0.1%, as of 9:35 a.m. Eastern time, and the Nasdaq composite was 
0.5% higher.

   Tesla helped lead the way and rose 7.2% after Elon Musk bought stock worth 
roughly $1 billion through a trust. The electric vehicle company's stock price 
came into the day with a slight loss for the year so far, and the purchase 
could be a signal of Musk's faith in it.

   That helped overshadow a 1.6% dip for Nvidia after China accused the chip 
company of violating its antimonopoly laws. Chinese regulators did not mention 
a punishment for Nvidia in their one-sentence statement but did say they would 
carry out "further investigation."

   The main event for the market, though, isn't arriving until Wednesday. 
That's when the Federal Reserve will announce its latest decision on interest 
rates, and the unanimous expectation is that it will announce its first cut of 
the year. Such a move could give a kickstart to the job market, which has been 
slowing.

   Stocks have already run to records on the assumption that a cut is coming on 
Wednesday, though. Expectations are also high that the Fed will keep cutting 
rates through the end of this year and into 2026. That creates the possibility 
for disappointment in the market, which would mean drops for stock prices, if 
the Fed doesn't end up cutting as aggressively as traders expect.

   That's why more attention will be on what Fed Chair Jerome Powell says in 
his press conference following the decision than on the decision itself. Fed 
officials will also release their latest projections for where they see 
interest rates and the economy heading in upcoming years, which will be another 
potential flashpoint.

   What could spook the Fed and cut off the chance for more cuts is a jump in 
inflation. That's because lower interest rates can give inflation more fuel and 
send it even higher. And inflation has proven difficult to get under the Fed's 
2% target, while President Donald Trump's tariffs threaten to move it higher.

   Another threat to the market is if the job market slows too much. In that 
case, the resulting recession could mean a downturn in corporate profits big 
enough to swamp whatever benefit lower interest rates bring in the short term 
and pull stocks lower.

   Trump, meanwhile, has been pushing angrily for more cuts to interest rates. 
He's often attacked Powell personally, nicknaming him "Too Late," and is 
pushing for the removal of one of the Fed's governors from its board.

   "'Too Late' must cut interest rates now, and bigger than he had in mind," 
Trump wrote on his social media network Monday, using his trademark all-caps 
style.

   In the bond market Treasury yields eased a bit, continuing their sharp 
downward run on expectations for coming cuts to rates by the Fed.

   The yield on the 10-year Treasury fell to 4.04% from 4.06% late Friday.

   In stock markets abroad, France's CAC 40 climbed 1%, while indexes moved 
more modestly across the rest of Europe and Asia.

   ___

   AP Writers Yuri Kageyama, Matt Ott and Ken Moritsugu contributed.

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