PayPal and UPS are sparking a late-session rally, powering stocks to fresh records

The S&P 500 rose 0.4% in late trading. The Dow Jones Industrial Average rose 265 points, or 0.6%, with just under an hour remaining in trading, and the Nasdaq Composite rose 1%. All three indices are coming off all-time highs.

Moves were also relatively modest in the bond market, as Wall Street waits for some event that could shake things up. On Wednesday, the Federal Reserve will announce its latest move on interest rates, while some of the most influential companies in the stock market will announce the amount of profits they made over the summer. president Donald Trump is scheduled to meet Thursday with Chinese leader Xi Jinping, hoping to calm tensions between the world’s two largest economies.

Until then, overnight and morning earnings reports were the main driver of Tuesday’s action.

United Parcel Service stock rose 7.5% after reporting stronger earnings and revenue in the fourth quarter than analysts expected. UPS also provided a revenue forecast for the important holiday shipping season that was slightly higher than analysts’ expectations.

PayPal shares jumped 6.9% after it said it made a bigger profit over the summer than analysts expected. It also said it plans to pay a dividend to its shareholders every quarter, while announcing a deal where internet users will be able to pay for purchases through OpenAI’s ChatGPT.

Skyworks Solutions rose 8.1% after it said it would merge with Qorvo in a cash-and-stock deal in which Skyworks shareholders would own approximately 63% of the combined company valued at $22 billion. Qorvo stock rose nearly 7.8%.

On the losing end of Wall Street was Royal Caribbean, which lost 8.7% despite posting stronger profits than analysts expected. Its revenues for the most recent quarter were below expectations. The cruise company also said it saw a “minimal” hit to its business this quarter due to inclement weather, along with the temporary closure of one of its exclusive destinations in Haiti.

Homebuilder DR Horton’s stock fell 3.3% after reporting weaker summer earnings than analysts expected. CEO David Auld said his company is still dealing with homebuyers who are finding it difficult to afford a home, coupled with cautious consumer sentiment. Dr. Horton is likely to continue offering incentives in the next fiscal year to attract buyers, he said.

Meanwhile, Amazon stock rose 1.5% after it said it would cut about 14,000 jobs at the company, or about 4% of the company’s workforce, while increasing spending on artificial intelligence while cutting costs elsewhere.

A slowdown in the labor market is one of the main reasons why Wall Street expects the Federal Reserve to announce another interest rate cut on Wednesday. If that happens, it would be the second time this year that the federal funds rate has been cut in hopes of helping the labor market.

The prevailing expectation is that the Fed will cut interest rates for the third time at its final meeting of the year. Much depends on it, in part because US stock prices have already risen to record highs based on their own expectations. That’s why the most important part of Wednesday’s announcement for Wall Street will be whether Federal Reserve Chairman Jerome Powell gives any hints about upcoming moves.

Fed officials have indicated that they are likely to continue cutting interest rates next year, but they may have to change course if inflation accelerates beyond its high level. This is because low interest rates can make inflation worse.

In the bond market, the yield on 10-year Treasury notes fell to 3.98% from 4.01% late Monday. A report showed that confidence among US consumers was slightly better than economists expected and had little impact on the market.

In overseas stock markets, indicators were mixed in Europe after modest losses in Asia.

Japan’s Nikkei 225 index fell 0.6% from its record high. South Korea’s Kospi index fell 0.8% in another one of the world’s biggest moves.

Among the strongest actions in financial markets were once again gold prices. It has been struggling after its incredible run this year, setting records and nearly hitting $4,400 an ounce last week. It has since fallen below $4,000 an ounce, and its gains for the year so far have shrunk to nearly 50%.

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AP Business Writers Yuri Kajiyama and Matt Ott contributed.