Wall Street takes a breath ahead of another week full of potential swings

Wall Street signage across form the New York Stock Exchange (NYSE) in New York, US, on Thursday, Jan. 2, 2025. US stocks powered higher on the back of optimism over the technology giants, signaling that Wall Street is set to rebound from the four-day slump that marked the end of 2024. Photographer: Michael Nagle/Bloomberg

NEW YORK — U.S. stocks drifted to a mixed finish on Monday, ahead of potential flashpoints this week that could bring more sharp swings for financial markets.

The S&P 500 inched up by 0.1% to extend its winning streak to a fifth day. The Dow Jones Industrial Average added 114 points, or 0.3%, and the Nasdaq composite slipped 0.1%.

The relative lull in trading offered a respite from the sharp, historic swings that have rocked markets for weeks, as hopes rose and fell that President Donald Trump may back down on his trade war. Many investors believe Trump’s tariffs could cause a recession if left unaltered. Coming into Monday, the S&P 500 had roughly halved its drop that had taken it nearly 20% below its record set earlier this year.

Mixed trading for some influential tech stocks ahead of their earnings reports this week pulled the S&P 500 back and forth between modest gains and losses for much of Monday.

Amazon fell 0.7%, Microsoft dipped 0.2%, Meta Platforms added 0.4% and Apple rose 0.4%. All are on the schedule to report their latest result this week, and they’re some of Wall Street’s most influential companies because they’ve grown to become some of the biggest in terms of size, by far. That gives their movements extra weight on the S&P 500 and other indexes.

Outside of Big Tech, executives from Caterpillar, Exxon Mobil and McDonald’s may also offer clues this week about how they’re seeing economic conditions play out. Several companies across industries have already slashed their estimates for upcoming profit or pulled their forecasts entirely because of uncertainty about what will happen with Trump’s tariffs.

“We heard more plans to mitigate tariff impacts than in prior months and than during 2018” from U.S. companies, including pre-ordering, shifting production and increasing prices for their own products, according to Bank of America strategist Savita Subramanian. But she also said in a report that she’s seeing “some indications of a pause: no hiring/no firing, no new projects/no cancellations etc.”

A fear is that Trump’s on-again-off-again tariffs may be pushing households and businesses to alter their spending and freeze plans for long-term investment because of how quickly conditions can change, seemingly by the hour.

All told, the S&P 500 rose 3.54 points to 5,528.75. The Dow Jones Industrial Average added 114.09 to 40,227.59, and the Nasdaq composite edged down by 16.81 to 17,366.13.

So far, economic reports have mostly seemed to show the U.S. economy is still growing, though at a weaker pace. On Wednesday, economists expect a report to say U.S. economic growth slowed to a 0.8% annual rate in the first three months of this year, down from a 2.4% pace at the end of last year.

But most reports Wall Street has received so far have focused on data from before Trump’s “Liberation Day” on April 2, when he announced tariffs that could affect imports from countries worldwide. That could raise the stakes for upcoming reports on the U.S. job market, including Friday’s, which will show how many workers employers hired during all of April.

Economists expect it to show a slowdown in hiring down to 125,000 from 228,000 in March.

The most jarring economic data recently have come from surveys showing U.S. consumers are getting much more pessimistic about the economy’s future because of tariffs. The Conference Board’s latest reading on consumer confidence will arrive on Tuesday.

In the bond market, Treasury yields fell some more. They’ve largely been sinking since an unsettling, unusual spurt higher in yields earlier this month rattled both Wall Street and the U.S. government. That rise had suggested investors worldwide may have been losing faith in the U.S. bond market’s reputation as a safe place to park cash.

The yield on the 10-year Treasury fell to 4.21% from 4.29% late Friday. It’s been pulling back recently as weaker-than-expected reports on the economy bolster expectations among investors that the Federal Reserve will deliver cuts to interest rates later this year. Such cuts could juice the economy by making it easier for households and companies to borrow and spend.

In stock markets abroad, indexes were mixed amid modest moves across much of Europe and Asia. The CAC 40 in Paris rose 0.5%, but stocks slipped 0.2% in Shanghai.

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AP writers Jiang Junzhe and Matt Ott contributed.

Stan Choe, The Associated Press