NEW YORK (AP) 鈥� Stocks rose on the eve of Election Day as Wall Street looked ahead to the benefits of a possibly split government in Washington, though trading is likely to stay bumpy in a week full of events that could shake the market. The S&P 500 rose 1%, while the Dow Jones Industrial Average gained 1.3% and the Nasdaq composite added 0.9%. Analysts say many investors seem to be making bets that Republicans will take control of at least one house of Congress. With a divided government, gridlock is more likely than big, sweeping policy changes that could upend tax and spending plans.
THIS IS A BREAKING NEWS UPDATE. AP鈥檚 earlier story follows below.
NEW YORK (AP) 鈥� Stocks rose in afternoon trading on Wall Street Monday as campaigning winds down for midterm elections in the U.S. that will determine which party controls Congress.
The S&P 500 rose 0.9% as of 2:33 p.m. Eastern. The Dow Jones Industrial Average rose 439 points, or 1.4%, to 32,843 and the Nasdaq rose 0.9%.
Apple was little changed following an earlier drop after the company warned customers they鈥檒l have to wait longer to get the latest iPhones after were imposed on a contractor鈥檚 factory in China. Facebook's parent company rose 5% after the Wall Street Journal reported that the company plans to make a big round of layoffs this week.
Cruise lines and other travel-related companies fell. Norwegian Cruise Line, which reports financial results Tuesday, slipped 1.6%.
Bond yields rose. The yield on the 10-year Treasury rose to 4.20% from 4.16% late Friday. The yield on the two-year Treasury rose to 4.73% from 4.66%.
will decide control of Congress and key governorships. History suggests the party in power may suffer losses in the midterms, and decades-high inflation has become a significant issue for the Democrats. Markets usually prefer a mixed balance of power that equates to few major changes in policy.
Stubbornly hot inflation and the to fight it remain the big concerns for Wall Street. Investors will get an important update on inflation Thursday when the U.S. government releases its report on consumer prices for October.
The update on prices will show where consumers are getting squeezed by inflation. More importantly, it could give investors more insight into the Fed's path ahead for fighting inflation, said Keith Buchanan, portfolio manager at Globalt Investments.
"It boils down to one question," he said. "What impact has the tightening from the Fed had on inflation?鈥�
Wall Street expects consumer prices to rise 8% in October from a year ago, which would be a slight cooling from an 8.2% increase in September.
The central bank has signaled that it might slow the pace of its rate increases as it determines the impact from its policy so far. The Fed has also said that it might have to ultimately raise rates higher than previously anticipated if inflation persists.
Wall Street is evenly split between expectations for a half-percentage point increase and a three-quarters of a percentage point increase at the central bank's next meeting in December, according to CME Group. It is also evenly split on whether the central bank ultimately raises rates to a range of 5% to 5.25% or 5.25% to 5.50% next year.
The policy has raised concerns that the Fed could go too far in slowing the economy and bring on a recession.
鈥淭he lags are different each cycle and for different reasons and we just don't know when the tightening will have the impact that was intended,鈥� Buchanan said.
The latest round of corporate earnings have provided mixed financial results and warnings from companies about inflation's impact on operations and demand for goods and services. More than 85% of companies in the S&P 500 have reported their latest earnings and overall growth is expected to top out at about 2.7%, according to FactSet.
Cautious and weak forecasts have had their impact on Wall Street's expectations for the rest of the year. Analysts have sharply cut their earnings growth expectations for the current quarter and now forecast a contraction of about 1.4%. They had forecast growth of more than 8% back in June.
Several big companies will report results this week, including Walt Disney on Tuesday.
Markets gained ground in Asia amid continued speculation of a possible relaxation of China鈥檚 zero-COVID strategy, though there has been no official confirmation in China of a major change.
European markets were mostly higher.
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Yuri Kageyama and Matt Ott contributed to this report.
Damian J. Troise, The Associated Press
