Financial Markets                      10/27 09:38

   

   NEW YORK (AP) -- Stocks are climbing toward more records on Monday ahead of 
a week packed with potentially market-moving events for Wall Street.

   The S&P 500 rose 0.8%. The Dow Jones Industrial Average was up 210 points, 
or 0.4%, as of 9:35 a.m. Eastern time, and the Nasdaq composite was 1.3% 
higher. All are adding to their latest all-time highs set on Friday.

   Stocks also rallied in Asia ahead of a meeting on Thursday between the heads 
of the United States and China. The hope is that the talks could clear rising 
tensions between the world's two largest economies and allow the global economy 
to keep motoring.

   U.S. Treasury Secretary Scott Bessent said there's "a framework" for U.S. 
President Donald Trump and Chinese leader Xi Jinping to discuss at their 
meeting, while Trump said, "We feel good" about working things out with China.

   That's just one of many things that will need to go right this week in order 
for the U.S. stock market's tremendous, record-breaking rally to continue. The 
S&P 500 has shot up a stunning 37% since hitting a low in April, when worries 
about Trump's tariffs on China and other countries were at their peak. Besides 
hopes for easing trade tensions, the rally has also been built on expectations 
for several more things to happen.

   One is that the Federal Reserve will keep cutting interest rates in order to 
give the slowing job market a boost. The Fed's next announcement on interest 
rates is due on Wednesday, and the nearly unanimous expectation among traders 
is that it will cut the federal funds rate by a quarter of a percentage point 
for a second straight meeting.

   It's not a certainty though, because the Fed has also warned it may have to 
change course if inflation ends up accelerating beyond its still-high level. 
That's because low interest rates can make inflation worse.

   The latest monthly report on inflation came in slightly better than 
economists expected, raising hopes, but it may be the final update for a while 
if the U.S. government's shutdown continues. That could cloud the forecast for 
cuts to rates to continue.

   Besides low interest rates, another expectation that's propped up stock 
prices is the forecasts that U.S. companies will continue to deliver solid 
growth in profits.

   Keurig Dr Pepper climbed 4.9% Monday after reporting profit for the latest 
quarter that matched analysts' expectations. The company behind the Canada Dry 
and Green Mountain coffee brands said it benefited from higher prices for K-Cup 
products, among other things

   Some of Wall Street's most influential stocks are also set to report their 
latest results this upcoming week, including Alphabet, Meta Platforms and 
Microsoft on Wednesday, and Amazon and Apple on Thursday. They'll need to 
deliver big growth and justify big spending that's underway in 
artificial-intelligence technology.

   Worries have been climbing that AI may be in the midst of a bubble, similar 
to the dot-com bonanza that ended up bursting in 2000.

   In stock markets abroad, indexes were mixed in Europe amid mostly modest 
moves following bigger gains in Asia.

   Stocks rose 1.2% in Shanghai and 1% in Hong Kong. They rose even more in 
Tokyo, where the Nikkei 25 jumped 2.5%, and in Seoul, where South Korea's Kospi 
rallied 2.6%.

   In the bond market, the yield on the 10-year Treasury was holding steady at 
4.02%, where it was late Friday.

   ___

   AP Business Writers Matt Ott and Elaine Kurtenbach contributed.

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