US markets today: Wall Street inches higher as S&P 500, Nasdaq hover near record highs; merger buzz, earnings and rate cut hopes in focus

Wall Street edged higher on Friday as the S&P 500 and Nasdaq hovered near record highs, putting US stocks on track for a third winning week in the past four. Strong corporate earnings, easing Treasury yields, and growing speculation of a Federal Reserve rate cut fuelled investor optimism.The S&P 500 rose 0.2% in early trade after setting a new all-time high a day earlier. The Nasdaq Composite gained 0.4%, while the Dow Jones Industrial Average slipped 25 points or 0.1%, as of 9:35 am Eastern Time, AP reported.Norfolk Southern surged 2.6% after an Associated Press source said the railway operator is in merger talks with Union Pacific. The proposed deal would create North America’s largest railroad network, linking the East and West coasts. Union Pacific shares edged 0.5% lower, amid concerns over likely regulatory scrutiny.Chevron rose 1.3% after completing its $53 billion acquisition of Hess, following a favourable arbitration ruling from the International Chamber of Commerce in Paris. The deal secures Chevron a stake in the massive Stabroek Block oil field off the coast of Guyana.Despite beating profit expectations, Netflix shares dropped 4.7%, as analysts attributed the decline to profit-booking after a stellar 43% gain this year — six times the S&P 500’s rise so far.Other corporate results buoyed sentiment. Charles Schwab rallied 4.4% and Comerica climbed 2.3% after delivering stronger-than-expected earnings.Bond yields slipped ahead of a key US consumer sentiment and inflation expectations report. The 10-year Treasury yield fell to 4.42% from 4.47%, while the 2-year yield dropped to 3.86% from 3.91%.Federal Reserve Governor Chris Waller added to rate cut hopes, stating the Fed should consider reducing its benchmark rate at the upcoming meeting. His comments come amid renewed pressure from President Donald Trump, who has criticised the Fed for not slashing rates this year.Trump has also linked rate cuts to lower government debt servicing costs, though long-term bond yields are more influenced by investor expectations than by Fed actions directly.Fed Chair Jerome Powell, however, remains cautious. He has indicated that the central bank needs more data to assess the impact of recent tariffs on inflation before acting. While lower rates can boost growth, they also risk fuelling inflation — especially as early signs point to upward price pressure from the tariff hikes.According to CME Group data, markets are still pricing in a greater chance of the first rate cut arriving in September rather than later this month.Global markets were mixed. Hong Kong’s Hang Seng rose 1.4%, but Japan’s Nikkei 225 dipped 0.2% ahead of Sunday’s upper house election, which could alter the ruling coalition’s majority.