Financial Markets                      06/17 09:33

   

   NEW YORK (AP) -- The U.S. stock market is drifting Wednesday as Wall Street 
waits to hear from the Federal Reserve in the afternoon about where it sees 
interest rates going.

   The S&P 500 added 0.2%, coming off a mixed day where falling tech stocks 
weighed on the index. The Dow Jones Industrial Average was up 240 points, or 
0.5%, as of 10:15 a.m. Eastern time, and the Nasdaq composite was 0.2% higher.

   Several stocks involved in the artificial-intelligence business headed back 
up their roller-coaster ride, supporting the market. Jabil rose 5.2% after 
reporting stronger results for the latest quarter than analysts expected, as 
CEO Mike Dastoor said that "AI infrastructure demand remains extremely strong."

   Broadcom climbed 4.4%, and Applied Materials rose 8.6%.

   Such AI stocks have veered up and down in recent weeks and yanked the rest 
of the market behind them on worries that their prices shot too high because of 
the mania around AI.

   SpaceX, meanwhile, erased an early gain and fell 2.3%. It's potentially on 
track for its first loss since its ballyhooed debut on the U.S. stock market 
last week.

   Outside of tech, La-Z-Boy jumped 21.4% after reporting stronger profit and 
revenue for the latest quarter than analysts expected. It benefited from 
revenue made at newly opened stores, though Chief Financial Officer Taylor 
Luebke said the company continues to have "a measured view" of the broad sales 
environment.

   A report released Wednesday said retailers across the country saw their 
revenue grow at a faster pace in May than economists expected, offering hope 
that solid spending by consumers can support the economy. But high inflation 
has also made U.S. shoppers feel more discouraged about their finances.

   The day's main event will come in the afternoon, when the Fed will announce 
its latest decision on what to do with interest rates. The widespread 
expectation is that it will leave its main interest rate alone, as it has 
throughout this year.

   Investors are more interested in the projections that Fed officials will 
give about where they see interest rates heading in upcoming years and what 
Kevin Warsh will say after his first meeting as the Fed's chair.

   Traders had been building bets that the Fed may have to raise its federal 
funds rate this year in order to keep a lid on inflation, which has accelerated 
because of expensive oil caused by the war with Iran. But oil prices have 
pulled back to $80 per barrel after the United States and Iran reached a 
tentative agreement on their war.

   Iran is set to immediately take steps to reopen the Strait of Hormuz once 
the deal is signed, and that would allow oil tankers to exit the Persian Gulf 
once again and deliver crude to customers worldwide. The hope is that will take 
pressure off inflation.

   As a result, traders are split on where the Fed could take interest rates 
through the end of the year. Some are betting on a cut to rates, which is 
something that President Donald Trump has angrily been calling for. But the 
most popular bet is for no move on rates, while some traders still see a hike 
as the most likely outcome, according to data from CME Group.

   Oil prices ticked higher Wednesday following their sharp slides on optimism 
about the tentative U.S.-Iran deal to get the global flow of oil going again. 
The price for a barrel of Brent crude oil rose 1.4% to $80.03. It's still above 
its roughly $70 price from before the war, but it's well below its $100-plus 
price from a few weeks ago.

   In the bond market, Treasury yields held relatively steady. The yield on the 
10-year Treasury remained at 4.43%, where it was late Tuesday.

   High yields in bond markets worldwide caused by worries about inflation have 
been threatening to slow economies and undercut prices for all kinds of 
investments.

   In stock markets abroad, indexes were mixed across Europe and Asia.

   London's FTSE 100 slipped 0.1% after a report showed U.K. inflation remained 
at 2.8% in May.

   South Korea's Kospi jumped 1.6%, and Hong Kong's Hang Seng fell 0.7% for two 
of the world's bigger moves.

   ___

   AP Business Writers Chan Ho-him, Matt Ott and Elaine Kurtenbach contributed 
to this report.

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