US stocks tick further into record heights as UPS and PayPal lead the market

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NEW YORK (AP) — The U.S. stock market is ticking further into record heights on Tuesday.

The S&P 500 rose 0.2% in early trading. The Dow Jones Industrial Average was up 294 points, or 0.6%, as of 9:35 a.m. Eastern time, and the Nasdaq composite was 0.5% higher. All three indexes are coming off their latest all-time highs.

Moves were also modest in the bond market ahead of a few events that could shake things up. On Wednesday, the Federal Reserve will announce its latest move on interest rates, while some of Wall Street’s most influential companies will report how much profit they made during the summer. On Thursday, President Donald Trump will meet China’s leader, Xi Jinping, in hopes of smoothing tensions between the world’s two largest economies.

Until then, profit reports from overnight and the morning were the main drivers of Tuesday’s action.

UPS rallied 11.6% after delivering stronger profit and revenue for the latest quarter than analysts expected. It also gave a forecast for revenue in the all-important holiday shipping season that was slightly above analysts’ expectations.

PayPal jumped 7.4% after saying it made a bigger profit during the summer than analysts expected. It also said it plans to pay its shareholders a dividend every three months, while announcing a deal with OpenAI where internet users will be able to pay for purchases through ChatGPT.

Skyworks Solutions soared 18.6% after saying it would merge with Qorvo in a cash-and-stock deal where Skyworks shareholders will own roughly 63% of the combined company, valued at $22 billion. Skyworks also reported stronger results for the latest quarter than expected. Qorvo jumped nearly as much, 14.5%.

On the losing end of Wall Street was Royal Caribbean, which lost 7.9% despite reporting a stronger profit than analysts expected. Its revenue for the latest quarter fell short of expectations. The cruise operator also said it’s seen a “minimal” hit to its business this quarter because of bad weather, along with the temporary closure of one of its exclusive destinations in Haiti.

Homebuilder D.R. Horton sank 3.5% after reporting a weaker profit for the summer than analysts expected. Executive Chairman David Auld said his company is still dealing with homebuyers finding it challenging to afford a house, along with cautious consumer sentiment. He said D.R. Horton will likely have to keep offering incentives in the upcoming fiscal year to attract buyers.

Amazon, meanwhile, edged up by 0.1% after saying it will cut about 14,000 corporate jobs, about 4% of its corporate workforce, as it ramps up spending on artificial intelligence while cutting costs elsewhere.

A slowing job market is one of the main reasons Wall Street is expecting the Fed to announce another cut to interest rates on Wednesday. If it does, it would be the second time this year where it’s lowered the federal funds rate in hopes of helping the job market.

The widespread expectation is that the Fed will cut again at its final meeting of the year. A lot is riding on that, in part because U.S. stock prices have already rallied to records on expectations for it. That’s why the more important part of Wednesday’s announcement for Wall Street will be whether the Fed and its chair, Jerome Powell, give any hints about upcoming moves.

The Fed has indicated that it’s likely to keep cutting interest rates into next year, but it may have to change course if inflation accelerates beyond its still-high level. That’s because low interest rates can make inflation worse.

In the bond market, the yield on the 10-year Treasury edged down to 3.99% from 4.01% late Monday.

In stock markets abroad, indexes were mixed in Europe following modest losses in Asia.

Japan’s Nikkei 225 fell 0.6% from its record high. South Korea’s Kospi sank 0.8% after the government reported relatively strong quarterly economic growth thanks to strong consumption, investments and exports.

Some of the strongest action in financial markets was again for the price of gold. It’s been struggling after an astonishing run this year, setting records and nearly reaching $4,400 per ounce last week. It’s since sunk toward $3,940 per ounce, and its gain for the year so far has ducked back below 50%.

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AP Business Writers Yuri Kageyama and Matt Ott contributed.