NEW YORK (AP) — U.S. stock indexes stormed back from big early drops on Wednesday to finish higher, led by a handful of influential Big Tech companies.
The S&P 500 rallied 1.1% after erasing a morning wipeout of 1.6%, one where almost every stock within the index had been falling. A majority of the index’s stocks still finished lower for the day, but the performances by Nvidia and other tech stocks were enough to drive it to a third straight gain and back within 2% of its all-time high set in July.
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NEW YORK (AP) — U.S. stock indexes stormed back from big early drops on Wednesday to finish higher, led by a handful of influential Big Tech companies.
Currency traders talk near the screens showing the Korea Composite Stock Price Index (KOSPI), left, the foreign exchange rate between U.S. dollar and South Korean won and the Korean Securities Dealers Automated Quotations (KOSDAQ), at a foreign exchange dealing room in Seoul, South Korea, Wednesday, Sept. 11, 2024. (AP Photo/Lee Jin-man)
Currency traders talk near the screens showing the Korea Composite Stock Price Index (KOSPI), left, the foreign exchange rate between U.S. dollar and South Korean won and the Korean Securities Dealers Automated Quotations (KOSDAQ), at a foreign exchange dealing room in Seoul, South Korea, Wednesday, Sept. 11, 2024. (AP Photo/Lee Jin-man)
A currency trader walks by the screens showing the foreign exchange rate between U.S. dollar and South Korean won at a foreign exchange dealing room in Seoul, South Korea, Wednesday, Sept. 11, 2024. (AP Photo/Lee Jin-man)
A currency trader walks by the screens showing the Korea Composite Stock Price Index (KOSPI), left, and the foreign exchange rate between U.S. dollar and South Korean won at a foreign exchange dealing room in Seoul, South Korea, Wednesday, Sept. 11, 2024. (AP Photo/Lee Jin-man)
The Dow Jones Industrial Average rose by 124 points, or 0.3%, after rallying back from a drop of 743 points. The Nasdaq composite jumped 2.2%.
The sharp see-saw trading, where the Nasdaq composite roared back from an earlier 1.4% slide, followed the government’s latest update on inflation at the consumer level. Overall inflation slowed to 2.5% in August from 2.9% in July, a touch better than expected. But prices rose more than expected from July into August when ignoring food and energy, and economists say that can be a better predictor of where inflation is heading.
All together, the data seemed to confirm that the Fed will indeed cut its main interest rate at its meeting next week, which would be the first such cut in more than four years. But it bolstered expectations that the Fed will begin with only a traditional-sized move of a quarter of a percentage point instead of the more severe half-point that some had been expecting.
Investors have a long history of being overly optimistic about how much and when the Fed will cut interest rates, only to send stock prices lower after being confronted with reality. Wall Street loves lower rates because they can goose the economy by making it cheaper for U.S. companies and households to borrow. The downside of lower rates is that they can give inflation more fuel.
“We believe the market is pricing in more rate cuts than what will occur this year,” said Gargi Chaudhuri, chief investment and portfolio strategist, Americas at BlackRock.
This time, the Fed at least has already indicated it’s about to begin lowering interest rates as it shifts from fighting high inflation toward protecting the job market and keeping the economy out of a recession. With inflation down from its peak of 9.1% two summers ago, the Fed is hoping to ease the brakes off the already slowing economy.
A worry on Wall Street is that the cuts may prove to be too late, with many U.S. shoppers already struggling under the weight of high prices and stretched ability to spend more.
Vera Bradley’s stock dropped 4.6% after the designer of handbags and the parent company of the Pura Vida brand reported weaker profit and revenue for the latest quarter than analysts expected. It pointed to “stubbornly persistent macro consumer headwinds.”
Elsewhere on Wall Street, Trump Media & Technology Group sank 10.5% to worsen its rough run since March. The company behind former President Donald Trump’s Truth Social platform has often risen and fallen with expectations for Trump’s re-election chances, and he’s coming off a debate with Vice President Kamala Harris.
Since closing above $66 in early March, the stock has tumbled to $16.68. That affects Trump particularly because he is the company’s largest shareholder.
On the winning side of the U.S. stock market were solar-energy companies, which are seen as doing better under a Democratic White House than a Republican one. First Solar jumped 15.2%.
Big Tech also once again lifted the market. A handful of these behemoths has pulled away from the rest of the stock market and accounted for most of the S&P 500’s return through the early part of this year, in large part on excitement about the artificial-intelligence boom.
They faltered during the summer on worries that investors had carried their stock prices too high, including a 27% drop for Nvidia at one point, but they’ve been firming in the last couple weeks.
Besides the 8.1% jump for Nvidia, gains of 2.8% for Amazon, 2.1% for Microsoft and 6.8% for Broadcom were the strongest forces lifting the S&P 500. Because these companies are among Wall Street’s largest by market value, their movements pack more punch on the index than almost every other stock.
All told, the S&P 500 rose 58.61 points to 5,554.13. The Dow rose 124.75 to 40,861.71, and the Nasdaq composite jumped 369.65 to 17,395.53.
In the bond market, the yield on the 10-year Treasury rose to 3.66% from 3.64% late Tuesday. The two-year yield, which more closely follows expectations for Fed action, rose more, to 3.65% from 3.59%.
In stock markets abroad, indexes fell across much of Europe and Asia.
Japan’s Nikkei 225 dropped 1.5% after a Japanese central bank official was quoted by Japanese media as indicating the Bank of Japan was getting ready to raise interest rates. The comments also pushed the value of the Japanese yen higher against the U.S. dollar, a move that earlier in the summer helped send financial markets around the world reeling.
AP Business Writers Yuri Kageyama and Matt Ott contributed.
The American flag hangs from the front of the New York Stock Exchange on Wednesday, Sept. 11, 2024, in New York. (AP Photo/Peter Morgan)
Currency traders talk near the screens showing the Korea Composite Stock Price Index (KOSPI), left, the foreign exchange rate between U.S. dollar and South Korean won and the Korean Securities Dealers Automated Quotations (KOSDAQ), at a foreign exchange dealing room in Seoul, South Korea, Wednesday, Sept. 11, 2024. (AP Photo/Lee Jin-man)
Currency traders talk near the screens showing the Korea Composite Stock Price Index (KOSPI), left, the foreign exchange rate between U.S. dollar and South Korean won and the Korean Securities Dealers Automated Quotations (KOSDAQ), at a foreign exchange dealing room in Seoul, South Korea, Wednesday, Sept. 11, 2024. (AP Photo/Lee Jin-man)
A currency trader walks by the screens showing the foreign exchange rate between U.S. dollar and South Korean won at a foreign exchange dealing room in Seoul, South Korea, Wednesday, Sept. 11, 2024. (AP Photo/Lee Jin-man)
A currency trader walks by the screens showing the Korea Composite Stock Price Index (KOSPI), left, and the foreign exchange rate between U.S. dollar and South Korean won at a foreign exchange dealing room in Seoul, South Korea, Wednesday, Sept. 11, 2024. (AP Photo/Lee Jin-man)
SRINAGAR, India (AP) — In Indian-controlled Kashmir, many people boycotted elections for decades in protest against Indian rule. But in the run-up to the local election beginning Wednesday, many are willing to buck that trend and use their vote to deny Prime Minister Narendra Modi’s party the power to form a local government in the disputed region.
The vote is the first in a decade, and the first since Modi’s Hindu nationalist government in 2019 scrapped the Muslim-majority region’s special status and downgraded the former state to a federally governed territory. The move — which largely resonated in India and among Modi supporters — was mostly opposed in the region as an assault on its identity and autonomy.
“Boycotts will not work in this election,” said Abdul Rashid, a resident in southern Kashmir’s Shangus village. “There is a desperate need to end the onslaught of changes coming from there (India).”
The election will allow residents to have their own truncated government and a local parliament called an assembly, instead of remaining under New Delhi’s direct rule. The region’s last assembly election was held in 2014, after which Modi’s Bharatiya Janata Party for the first time ruled the region in a coalition with the local Peoples Democratic Party.
But the government collapsed in 2018 after BJP withdrew from the coalition. Polls in the past have been marked with violence, boycotts and vote-rigging, even though India called them a victory over separatism.
This time, New Delhi says the polls are ushering in democracy after more than three decades of strife. However, many locals see the vote as an opportunity not only to elect their own representatives but also to register their protest against the 2019 changes.
Polling will be held in three phases. The second and third phases are scheduled for Sept. 25 and Oct. 1. Votes will be counted on Oct. 8, with results expected that day.
Kashmir is divided between nuclear-armed rivals India and Pakistan. Since 1947, the neighbors have fought two wars over its control, after British rule of the subcontinent ended with the creation of the two countries. Both claim the Himalayan territory in its entirety.
In 2019, the Indian-controlled part of the region was divided into two territories, Ladakh and Jammu-Kashmir, ruled directly by New Delhi. The region has been on edge since it lost its flag, criminal code, constitution and inherited protections on land and jobs.
Multiple pro-India Kashmiri parties, many of whose leaders were among thousands jailed in 2019, are contesting the election, promising to reverse those changes. Some lower-rung separatist leaders, who in the past dismissed polls as illegitimate exercises under military occupation, are also running for office as independent candidates.
India’s main opposition Congress party, which favors restoration of the region’s statehood, has formed an alliance with the National Conference, the region’s largest party. Modi’s BJP has a strong political base in Hindu-dominated areas of Jammu that largely favor the 2019 changes but is weak in the Kashmir Valley, the heartland of anti-India rebellion.
“Our main concern is governance through local representatives. It will be good for us if the BJP forms the government here as it’s already in power at the center,” said Chuni Lal, a shopkeeper in Jammu city.
The vote will see a limited transition of power from New Delhi to the local assembly, with a chief minister at the top heading a council of ministers. But Kashmir will continue to be a “Union Territory” — a region directly controlled by the federal government — with India’s Parliament remaining its main legislator.
The elected government will have partial control over areas like education, culture and taxation but not over the police. Kashmir’s statehood must be restored for the new government to have powers similar to other states in India. However, it will not have the special powers it enjoyed before the 2019 changes.
Last year, India’s Supreme Court endorsed the government’s 2019 changes but ordered New Delhi to conduct local polls by the end of September and restore Kashmir’s statehood. Modi’s government has promised to restore statehood after the polls but has not specified a timeline.
Elections in Indian-held Kashmir have remained a sensitive issue. Many believe they have been rigged multiple times in favor of local politicians who subsequently became India’s regional enforcers, used to incrementally dilute laws that offered Kashmir a special status and legitimize New Delhi’s militaristic policies.
In the mid-1980s, the region’s dissident political groups emerged as a formidable force against Kashmir’s pro-India political elite but lost the 1987 election widely believed to have been rigged. A public backlash followed, with some young activists taking up arms and demanding a united Kashmir, either under Pakistani rule or independent of both.
India insists the insurgency is Pakistan-sponsored terrorism, a charge Islamabad denies. Tens of thousands of people have been killed in the fighting, which most Kashmiri Muslims consider a legitimate freedom struggle.
Noor Ahmed Baba, a political scientist, said the outcome of the polls “is not going to change the dynamics of the Kashmir dispute” since it will end with a largely powerless legislature, but will be crucial for optics.
“If local parties win, it is going to put some pressure on the central government and perhaps delegitimize from a democratic perspective what has been done to Kashmir. But a BJP win can allow the party to consolidate and validate 2019 changes in the local legislature,” Baba said.
India’s ruling BJP is not officially aligned with any local party, but many politicians believe it is tacitly supporting some parties and independent candidates who privately agree with its stances.
The National Conference party says Modi’s BJP is trying to manipulate the election through independent candidates. “Their (BJP’s) concerted effort is to divide the vote in Kashmir,” said Tanvir Sadiq, a candidate from the National Conference.
The BJP’s national secretary, meanwhile, says his party’s former ally, the Peoples Democratic Party, and the National Conference are being supported by former militants. Ram Madhav said at a recent rally that they want to return the region to its “trouble-filled days.”
For residents whose civil liberties have been curbed, the election is also a chance to choose representatives they hope will address their main issues.
Many say that while the election won’t solve the dispute over Kashmir, it will give them a rare window to express their frustration with Indian control.
“We need some relief and end of bureaucratic rule here,” said Rafiq Ahmed, a taxi driver in the region’s main city of Srinagar.
Bharatiya Janata Party (BJP) party workers attend a rally, ahead of Jammu and Kashmir Assembly elections in Jammu, India, Saturday Sep.7, 2024.(AP Photo/Channi Anand, File)
Former union minster and star campaigner of BJP Anurag Thakur and state in charge Ram Madhav wave to supporters during a campaign rally, after party candidates filed the nomination papers for the upcoming Jammu and Kashmir Assembly elections at Nagrota outskirts of Jammu, India, Thursday, Sep.12, 2024.(AP Photo/Channi Anand, File)
Supporters of India's opposition Congress party, wave during an election rally at Dooru some 78 kilometers (49 miles) south of Srinagar, Indian controlled Kashmir,Wednesday, Sept. 4, 2024. (AP Photo/Mukhtar Khan, File)
Supporters of Awami Ittehad Party (AIP) leader Sheikh Abdul Rashid, also known as Engineer Rashid, attend a public rally at Baramulla, some 55 kilometers (34 miles) north of Srinagar, Indian controlled Kashmir, Sept. 12, 2024. (AP Photo/Mukhtar Khan, File)
Awami Ittehad Party (AIP) leader Sheikh Abdul Rashid, also known as Engineer Rashid, speaks during a public rally at Baramulla, some 55 kilometers (34 miles) north of Srinagar, Indian controlled Kashmir, Sept. 12, 2024. (AP Photo/Mukhtar Khan, File)
Policemen stop supporters of National Conference Party from accompanying their candidate during the filing of nomination papers for the upcoming Jammu and Kashmir Assembly elections in Jammu, India, Sept.10, 2024. (AP Photo/Channi Anand, File)
Supporters listen as India's opposition Congress party leader Rahul Gandhi, unseen, speaks during an election rally at Dooru some 78 kilometers south of Srinagar, Indian controlled Kashmir, Wednesday, Sept. 4, 2024. (AP Photo/Mukhtar Khan, FILE)
Supporters of India's opposition Congress party leader Rahul Gandhi, shout slogans during an election rally at Dooru, some 78 kilometers south of Srinagar, Indian controlled Kashmir, Sept. 4, 2024. (AP Photo/Mukhtar Khan, File)
People watch from a window during a road show of Peoples Democratic Party (PDP) candidate Arif Laigroo, in Srinagar, Indian-controlled Kashmir Sunday, Sept. 15, 2024. (AP Photo/Mukhtar Khan, File)
National Conference (NC) President Farooq Abdullah, center, Peoples Democratic Party (PDP) leader Mehbooba Mufti, second right, and other leaders sit during an all parties meeting on restoration of the special status that was stripped last year from Indian-administered Kashmir, in Srinagar, India. (AP Photo/Mukhtar Khan, File)
A child looks on as Indian policemen frisk Kashmiri pedestrians during a surprise security check in Srinagar, Indian controlled Kashmir, Monday, Jan. 9, 2023. (AP Photo/Mukhtar Khan, File)
Indian security forces walk past Indian flags and flags of India's ruling Bharatiya Janata Party (BJP) as a motorcycle rally by BJP youth wing to the Kargil War Memorial passes through Srinagar, Indian controlled Kashmir, Monday, July 25, 2022. (AP Photo/Mukhtar Khan, File)
Kashmiris shout slogans during a protest after Friday prayers against the abrogation of article 370, on the outskirts of Srinagar, Indian controlled Kashmir, Friday, Oct. 4, 2019.(AP Photo/ Dar Yasin, File)
A masked protester throws stone at Indian security forces during a protest after Eid prayers in Srinagar, Indian controlled Kashmir, Saturday, June 16, 2018. (AP Photo/Dar Yasin, File)
Kashmiris sit outside closed shops painted with graffiti during a curfew in central Srinagar, India, Thursday, Sept. 16, 2010. (AP Photo/Dar Yasin, File)
