Financial Markets                      10/27 15:25

   

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

   The S&P 500 rose 1.2%. The Dow Jones Industrial Average added 337 points, or 
0.7%, and the Nasdaq composite jumped 1.9%. Each of the trio set an all-time 
high for a second straight day.

   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 38% 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 
at a second straight meeting.

   It's not a certainty though, because the Fed has also warned it may have to 
change course if inflation accelerates 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 lower interest rates, another expectation that's propped up stock 
prices is the forecast that U.S. companies will continue to deliver solid 
growth in profits.

   Keurig Dr Pepper climbed 7.6% Monday after reporting profit for the latest 
quarter that matched analysts' expectations. The company behind Canada Dry and 
Green Mountain coffee said it benefited from higher prices for K-Cup products, 
among other things

   Some of Wall Street's most influential stocks are set to report their 
results this 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 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. Nvidia's stock is up 
42.6% for the year so far, for example, and Qualcomm soared 11.1% Monday after 
unveiling AI products for data centers.

   Announcements of mergers and buyouts also helped move stocks on Monday. 
Cadence Bank rose 4.4% after Huntington Bancshares said it would buy the bank 
with locations across Texas and the South for $7.4 billion in stock. Huntington 
fell 2.7%.

   Avidity Biosciences leaped 42.4% after Novartis agreed to buy the 
biopharmaceutical company based in San Diego for $12 billion, after Avidity 
spins off its early-stage precision cardiology programs.

   All told, the S&P 500 rose 83.47 points to 6,875.16. The Dow Jones 
Industrial Average added 337.47 to 47,544.59, and the Nasdaq composite climbed 
432.59 to 23,637.46.

   In stock markets abroad, indexes rose modestly in Europe following bigger 
gains in Asia.

   Stocks climbed 1.2% in Shanghai and 1% in Hong Kong. They rose even more in 
Tokyo, where the Nikkei 225 jumped 2.5%, and in Seoul, where South Korea's 
Kospi rallied 2.6%.

   The Nikkei 225 topped the 50,000 level for the first time as opinion polls 
show Japan's newly installed Prime Minister Sanae Takaichi enjoying high levels 
of public support for her market-friendly policies. Takaichi favors raising 
spending on defense, which has boosted prices of stocks in major defense 
contractors, such as Kawasaki Heavy Industries, which jumped 9% Monday.

   In the bond market, the yield on the 10-year Treasury eased to 3.99% from 
4.02% late Friday.

   All the optimism flowing through financial markets helped knock down the 
price of gold. The metal's price has stalled after it nearly touched $4,400 per 
ounce last week, when it set its latest record. It briefly dropped below $4,000 
Monday, but it's still up more than 50% for the year so far.

   ___

   AP Business Writers Matt Ott and Elaine Kurtenbach contributed.

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