Business – Page 25

Justice Department seeks breakup of Live Nation-Ticketmaster through major antitrust suit

May 23, 2024 by WDNY Radio

(WASHINGTON) — The Justice Department and dozens of state and district attorneys general filed a major antitrust lawsuit Thursday seeking the breakup of Ticketmaster owner Live Nation Entertainment over what they allege is the company’s unlawful dominance over the concert ticket sales industry.

The lawsuit, filed in federal court in the Southern District of New York, accuses the company of creating a monopoly over the live entertainment market that has harmed music fans, artists and promoters around the United States through higher prices and frustrating consumer experiences.

“The result is that fans pay more in fees, artists have fewer opportunities to play concerts, smaller promoters get squeezed out, and venues have fewer real choices for ticketing services,” Attorney General Merrick Garland said in a statement announcing the lawsuit. “It is time to break up Live Nation.”

“For too long, Live Nation and Ticketmaster have unfairly and illegally run the world of live events, abusing their dominance to overcharge fans, bully venues, and limit artists,” New York Attorney General Letitia James said in a statement. “When companies like Live Nation control every aspect of an event, it leads to bad blood — concertgoers and sports fans suffer and are forced to pay more. Everybody agrees, Live Nation and Ticketmaster are the problem and it’s time for a new era. Today, we are taking this important action to protect consumers and force big companies to stop abusing their influence and get in formation.”

The sweeping lawsuit is a product of a more than two-year-long investigation into the company that has come under growing public scrutiny since late 2022, following a fiasco over presales for Taylor Swift’s Eras Tour.

Ticketmaster, which controls more than 70% of the market for ticketing and live events, crashed during the first day of sales, leaving millions of fans out of luck or seeking higher-priced tickets on the secondary market.

The Justice Department’s lawsuit accuses LiveNation of seeking to lock out competitors to protect what the company dubs its “flywheel,” described in court documents as “a self-reinforcing business model that captures fees and revenue from concert fans and sponsorship, uses that revenue to lock up artists to exclusive promotion deals, and then uses its powerful cache of live content to sign venues into long-term exclusive ticketing deals, thereby starting the cycle all over again.”

Live Nation did not immediately respond to ABC News’ request for comment on the lawsuit, though its president, Joe Berchtold, has otherwise defended the company’s business practices — including during a contentious appearance before Congress early last year.

Live Nation released a statement Thursday following the lawsuit, saying, in part, that it’s “absurd to claim that Live Nation and Ticketmaster are wielding monopoly power.”

The lawsuit “blames concert promoters and ticketing companies — neither of which control ticket prices — for high ticket prices,” said Dan Wall, executive vice president of corporate and regulatory affairs of Live Nation Entertainment, Inc. “It ignores everything that is actually responsible for higher ticket prices, from increasing production costs to artist popularity, to 24/7 online ticket scalping that reveals the public’s willingness to pay far more than primary tickets cost. It blames Live Nation and Ticketmaster for high service charges, but ignores that Ticketmaster retains only a modest portion of those fees. In fact, primary ticketing is one of the least expensive digital distributions in the economy.”

“The defining feature of a monopolist is monopoly profits derived from monopoly pricing. Live Nation in no way fits the profile. Service charges on Ticketmaster are no higher than elsewhere, and frequently lower. And even accounting for sponsorship, an advertising business that helps keep ticket prices down, the company’s overall net profit margin is at the low end of profitable S&P 500 companies,” Wall said.

“It is also clear that we are another casualty of this administration’s decision to turn over antitrust enforcement to a populist urge that simply rejects how antitrust law works,” Wall said, in part. “Some call this ‘anti-monopoly,’ but in reality it is just anti-business.”

Among the practices singled out by the DOJ are allegations Live Nation exploited its relationship with the company Oak View Group that the lawsuit says describes itself as a “hammer” for Live Nation and has avoided bidding against the company for exclusive agreements with artists and major venues.

The company, according to the Justice Department, also allegedly carried out a pattern of threatening potential competitors seeking to enter the concert promotions market and creating a climate where venue owners would fear entering into contracts with Live Nation-Ticketmaster’s rivals.

Live Nation-Ticketmaster is also accused of using lengthy exclusive contracts with venues that the lawsuit claims prevent them from switching to better or cheaper ticketing systems, and, in certain instances, allegedly blocked venues from even being able to use multiple ticketers for events.

Live Nation was already under a consent decree with the Justice Department after it approved its merger with Ticketmaster during the Obama administration in 2010 — under conditions that included prohibiting the company from threatening concert venues that opted to use competing ticket firms. That decree was extended in 2019 after the department found the company violated its conditions.

The lawsuit is the latest in a series of aggressive antitrust efforts by the Biden administration, which has brought similar enforcement efforts challenging companies like Apple, Google and Amazon over what it alleges are clear anti-competitive practices that have served to harm American consumers.

This is a developing story. Please check back for updates.

Justice Department and 30 states seek breakup of Live Nation-Ticketmaster through major antitrust suit

May 23, 2024 by WDNY Radio

(WASHINGTON) — The Justice Department and 30 states filed a major antitrust lawsuit Thursday seeking the breakup of Ticketmaster owner Live Nation Entertainment over what they allege is the company’s unlawful dominance over the concert ticket sales industry.

This is a developing story. Please check back for updates.

Target, McDonald’s and Wendy’s announce discounts. Has a price war broken out?

May 23, 2024 by WDNY Radio

(NEW YORK) — For more than three years, rapid inflation has frustrated shoppers scanning store shelves for deals. But a host of prominent companies are finally delivering relief.

Target, Ikea, Aldi, McDonald’s and Wendy’s are among several well-known brands that have announced lower prices in recent weeks.

“We know consumers are feeling pressured to make the most of their budget,” Rick Gomez, an executive vice president at Target, said in a statement this week after the company lowered prices for 5,000 items, including frozen pizza and butter.

The rapid-fire series of customer-friendly announcements isn’t a coincidence, economists told ABC News, as many companies fight over customers who are pinching pennies after a prolonged bout of elevated prices.

The competition is most intense between companies, like fast food joints and big-box stores, that cater to low- and middle-income people, experts added.

“After the shell shock of seeing the buying power of their dollar fall so dramatically, consumers are most likely to consider price, price and price as their three most important factors,” Jason Taylor, an economics professor at Central Michigan University, told ABC News.

“It should not be surprising to see firms competing so strongly on price,” Taylor added.

Last week, McDonald’s announced a $5 value meal set to hit stores next month. Wendy’s followed suit on Monday, releasing a $3 deal that features a breakfast sandwich and potatoes.

Aldi, a nationwide grocery chain, said earlier this month that it would lower prices on 250 items, reducing, for instance, the price of sirloin steak from $8.49 to $6.99.

The price cuts come at a time when many customers have few dollars to spare.

In response to accelerated price increases, the Federal Reserve embarked on an aggressive series of interest rate hikes and has yet to ease them. For nearly a year, the Fed has held interest rates at their highest level since 2001.

Price increases, meanwhile, have slowed significantly from a peak of about 9%, but inflation still stands more than a percentage point higher than the Federal Reserve’s target rate of 2%.

The persistence of elevated inflation alongside high interest rates has squeezed many consumers, who grapple with stiff prices but face expensive borrowing costs for loans that could help ease the financial pain.

Over the first three months of 2024, U.S. household debt ballooned to a record $12.44 trillion, climbing $184 billion over that period, or about 1.1%, according to the New York Federal Reserve.

Credit card debt, meanwhile, climbed to a record high $1.13 trillion at the end of last year, New York Federal Reserve data showed.

“Debt burdens are much heavier given the aggressive borrowing these households have done to supplement their income and maintain their purchasing power in the face of their higher costs,” Mark Zandi, chief economist at Moody’s Analytics, told ABC news.

In turn, strapped shoppers have become more sensitive in their spending, putting pressure on companies to lower their prices or risk losing out on business, Zandi added.

“Price competition among businesses that generally cater to lower income households is heating up,” Zandi said. “Lower income households are under significant financial pressure.”

Meanwhile, many companies can lower prices without suffering losses, since the outbreak of inflation in the aftermath of the COVID-19 pandemic brought about a surge in profitability, experts said.

In 2021, corporate profit margins skyrocketed from about 11% in the first quarter to 19% in the second, eventually stabilizing at an elevated level of 15% over the ensuing year, Fed data showed.

The profit margins also spur competition, inducing companies to enter a new market or lower prices as a means of capturing some of the lucrative business, Steve Hanke, a professor of applied economics at Johns Hopkins University, told ABC News.

“If profits start getting fat in a free market system, that invites competition and competition whittles the profit margins down,” Hanke said.

He went on, “Target is not insulated. Neither is Aldi, McDonald’s or Wendy’s.”

The discounts may also offer reason to be optimistic about the outlook for inflation, Hanke said, noting that the lower prices suggest an expectation among business leaders that their input costs are unlikely to accelerate.

“They won’t be facing costs that are rising as fast as they are now,” Hanke said. “The hot costs have come out of their expectations.”

Aldi stores focusing on low grocery prices this summer, CEO says

May 23, 2024 by WDNY Radio

(NEW YORK) — As inflation continues to worry Americans, Aldi CEO Jason Hart said the discount grocery chain is focused on keeping grocery prices low as the summer season heats up.

Hart joined ABC News’ Good Morning America live Thursday to discuss the summer grocery outlook ahead of Memorial Day.

“We don’t really focus on what the competition is doing. We’re focused on what consumers want and need,” Hart said. “Before the consumer was stressed with inflation, we were still about low prices, but those low prices become even more important as value is even more top of mind for the consumer.”

“So our actions are all based on consumer demand,” Hart continued. “We’re always looking for opportunities to lower prices to reduce our cost of doing business, to reduce our cost of product and to lean in on our lower prices. So that’s what we’re all about.”

Earlier this month, Aldi announced it would cut prices on over 250 summer essentials, including barbecue basics like chicken and steak and other family favorites like frozen blueberries and granola bars.

“It’s focused on, as you can imagine, fresh meat, snacks for the summer road trip and our fresh meat prices are lower than they were last year and our sales are up 30%,” Hart said, adding that low prices are part of the “DNA” of Aldi. “We’ve got our boneless, skinless chicken breasts at $2.19 a pound. Since we’ve marked that product down, it’s up 50% in movement and that’s just showing the popularity of low prices and the popularity of Aldi is as high as it’s ever been.”

Other major stores followed suit, including Walmart and Target, with the Minneapolis-based store saying it would lower prices on 5,000 items, including “everyday items” such as milk, meat, fresh fruit, vegetables and snacks.

Hart said lower prices are driving Aldi’s growth. The discount grocery chain announced this May it would open 800 more stores over the course of the next five years, especially in the Southeast.

“Twenty-five percent of U.S. customers now shop at Aldi. That’s twice what it was just six years ago,” Hart said. “And Aldi’s built to fight inflation. Our business model, which is based on simplicity and efficiency, really provides savings for customers and also saves them time when they’re shopping with their grocery lists.”

Justice Department to announce lawsuit against Live Nation over ticket prices: Sources

May 23, 2024 by WDNY Radio

(WASHINGTON) — The Justice Department and a group of state attorneys general are expected to announce an antitrust lawsuit against Live Nation as soon as Thursday over Ticketmaster’s dominance over the concert ticket sales market, two sources familiar with the matter told ABC News on Wednesday.

Details of the pending lawsuit were not immediately clear.

The Justice Department’s antitrust suit follows a more than two-year investigation that probed whether the company created a monopoly over the concert ticket market through its exclusive contracts with venues.

The Justice Department declined to comment on the investigation. Live Nation did not immediately comment about the probe.

The Washington Post and Bloomberg first reported news of the expected lawsuit.

The company has come under increased scrutiny since late 2022 following a fiasco over pre-sales for Taylor Swift’s “Eras Tour.”

A StubHub secondary ticket for the show sold as high as $22,000.

Live Nation acknowledged the issues over the presales and said high demand for the show, technical issues and bots were behind it. The company said that every customer with a “Verified Fan” code was able to purchase an “Eras Tour” ticket.

Swift addressed the incident, without naming Live Nation or Ticketmaster, and chastised the system.

“It’s really difficult for me to trust an outside entity with these relationships and loyalties, and excruciating for me to just watch mistakes happen with no recourse,” Swift said in a statement.

Ticketmaster and Live Nation have been accused of mistreating customers with speculative ticket sales, deceptive websites and large hidden fees ever since they merged in 2010.

In 2019, the company paid fines pertaining to the company violating the agreed-upon terms of a Justice Department consent decree during the final merger.

Swift fans have filed a lawsuit against Live Nation over the Eras Tour debacle contending that the company violated antitrust laws and deceived customers.

In January 2023, Joe Berchtold, Live Nation’s president and CFO, testified before the Senate Judiciary Committee and was grilled by members of both sides of the aisle over these issues.

Berchtold apologized for the fiasco and blamed ticket scalping as the cause behind it.

“There are problems in the ticketing industry — problems that we believe can and should be addressed through legislation,” he said.

Last June, representatives from Live Nation met with President Joe Biden and later announced “upfront all-in” pricing that discloses fees when a consumer is shopping for a ticket.

FDIC head who oversaw alleged ‘toxic culture’ to stay until his replacement. Experts say that risks more harm

May 23, 2024 by WDNY Radio

(WASHINGTON) — The head of the Federal Deposit Insurance Corporation said this week that he would leave his role in the aftermath of a probe that documented widespread allegations of sexual harassment and discrimination at the federal agency.

Martin Gruenberg, a Democrat who began a five-year term in 2023, said he will remain in the top post at the FDIC until a replacement can be confirmed by the Senate, which could take months. President Joe Biden will announce a nominee for FDIC chair soon, the White House told ABC News in a statement this week.

“In light of recent events, I am prepared to step down from my responsibilities once a successor is confirmed,” Gruenberg said. “Until that time, I will continue to fulfill my responsibilities as Chairman of the FDIC, including the transformation of the FDIC’s workplace culture.”

The plan to maintain Gruenberg’s leadership until a replacement can be installed presents a setback for efforts to overhaul the organization’s toxic culture and prevent further harm, experts told ABC News. The toxic workplace culture at the FDIC took hold alongside complaints about Gruenberg’s own alleged temper, which may hinder his ability to establish trust with employees as the organization pursues the necessary changes, the report said.

The report acknowledged that Gruenberg’s conduct did not make up a “root cause” of the pervasive sexual harassment and discrimination at the agency. But, the report added, “culture starts at the top.”

A fix for the pervasive misconduct at the agency, experts said, requires long-term reform and employee protections that extend well beyond the departure of Gruenberg.

“Leaders underestimate the shadows that they cast,” Allison Gabriel, a professor of management in the business school at Purdue University, told ABC News. “We look to people at the top of an organization or anybody who holds a leadership role as a beacon for what behavior is accepted and rewarded.”

“The reality is that it will take a leadership change,” Gabriel added. “It will also take a lot of time.”

The FDIC and Gruenberg did not respond to ABC News’ requests for comment.

In a statement to ABC News, White House Deputy Press Secretary Sam Michel commended Gruenberg for his service at the FDIC and his commitment to implement workplace changes outlined in the investigation.

“In his long tenure of service at the FDIC, Chairman Gruenberg has helped protect the economy from financial instability and worked to ensure the banking system serves more Americans fairly,” Michel said. “While the FDIC is an independent agency, as we have said, the President of course expects the Administration to reflect the values of decency and integrity and to protect the rights and dignity of all employees.”

A 234-page report, issued by law firm Cleary Gottlieb Steen & Hamilton earlier this month, detailed a culture of widespread misconduct at the agency that disproportionately harmed women and minority workers.

Wrongdoers often avoided punishment and, in some cases, received promotions after their misbehavior had been reported, according to the report, which relied on testimony from 500 current and former employees. Hundreds of employees shared their complaints by calling a hotline set up by investigators, the report said.

In one field office, a supervisor routinely commented to women employees about their sexual relationships and bodies, the women told investigators, according to the report. In another instance, a woman examiner received a picture of a senior examiner’s genitals out of the blue while working in a field office, the report said, noting that the woman later found out that the senior examiner had a “reputation.”

Some allegations detailed in the report focused on Gruenberg, who led the agency for 10 of the last 13 years. Some people interviewed over the course of the investigation recounted “deeply unsettling exchanges during which he was extremely ‘harsh,’ ‘aggressive,’ and ‘upset,'” the report said.

Gruenberg told investigators that he did not recall ever getting angry with FDIC employees, the report said. In November, he told the Wall Street Journal that harassment and discrimination are “completely unacceptable” and the agency doesn’t tolerate them.

Lisa Avalos, a professor at Louisiana State University Law School who focuses on sexual offenses, said the preservation of Gruenberg as the head of the FDIC for the time being will hamstring efforts to prevent further misconduct and repair the agency’s culture.

“The person at the top is always setting an example for everybody else,” Avalos said. “Part of it is what he has actively done, which caused discomfort for people. The other part is how he’s contributed to the culture through his omissions.”

She added, “It’s very unlikely that anything is going to change during this time waiting for his replacement.”

Gabriel, of Purdue University, agreed.

“Keeping the status quo can continue to harm people,” Gabriel said. “It’s putting people in a really difficult position now that they’ve unearthed these problems.”

Still, the extensive misconduct at the agency will demand structural and cultural changes that go much further than a swap in leadership, according to recommendations in the report as well as expert analysis shared with ABC News.

The report advises several fixes, including the appointment of a team of staff devoted to addressing the cultural problems as well as bolstered policies covering sexual harassment and discrimination.

“My primary concern when I hear about cases like this is they’re going to fire this person and then they’re going to do company-wide harassment training and do some other thing that does not have long-term returns,” Jennifer Griffith, a professor of organizational behavior and management at the University of New Hampshire, told ABC News.

“I would really, really urge anyone who is trying to make actual, meaningful progress in this area to consider the structural elements in the organization,” Griffith added. “Who’s being rewarded and who’s being penalized, and what are people’s daily jobs like?”

Wendy’s launches $3 English muffin breakfast combo amid soaring prices in fast food

May 21, 2024 by WDNY Radio

Wendy’s launches English muffin breakfast combo amid soaring prices in fast food

Wendy’s launches $3 English muffin breakfast combo amid soaring prices in fast food — The Wendy’s Company

(NEW YORK) — Wendy’s is enticing its customers with a new deal amid increased prices at fast food chains.

Beginning Monday, May 20, customers can get a breakfast combination deal from Wendy’s for only $3, according to a press release from the chain.

The meal combo includes a small portion of seasoned potatoes and a choice of either a bacon, egg and cheese English muffin or a sausage, egg and cheese English muffin, the release added.

Wendy’s did not immediately respond to ABC News’ request for comment.

Earlier this month, Wendy’s competitor McDonald’s announced that it would be launching a new $5 value meal that will hit the menu this summer.

The upcoming promotion offers four items including a McDouble or McChicken sandwich, small fries, small soft drink and four-piece Chicken McNuggets for just $5, beginning June 25 for a limited time, as first reported by the Wall Street Journal.

“We know how much it means to our customers when McDonald’s offers meaningful value and communicates it through national advertising. That’s been true since our very beginning and never more important than it is today,” the company said in an emailed statement to ABC News.

The new deals from the chains came amid complaints over surging fast food prices prompting consumers to express their frustration on social media.

Colleen Pipes, whose video went viral after she spent $14 on a fast food order, told ABC News, “I joked that this was fine dining now, because I might as well go at a sit down restaurant and be served [to] pay those type of prices.”

In March, fast food prices were 33% higher compared to 2019, according to the Department of Labor, while grocery prices were up 26%.

Target to cut prices on 5,000 items: See which items will cost less

May 21, 2024 by WDNY Radio

(NEW YORK) — Retail giant Target announced Monday it is lowering prices on around 5,000 items in its stores across the country.

The Minneapolis-based retailer said the price cuts are meant to both make sure its prices stay competitive and help consumers who are feeling financially strapped in today’s economy.

“We know consumers are feeling pressured to make the most of their budget, and Target is here to help them save more,” Rick Gomez, Target’s executive vice president and chief food, essentials and beauty officer, said in a statement announcing the price changes. “Our teams work hard to deliver great value every day, and these new lower prices across thousands of items will add up to additional big savings for the millions of consumers that shop Target each week for their everyday needs.”

Target said the price cuts will take effect “over the course of the summer,” and noted that prices on around 1,500 items in its stores have already been cut.

Lower prices to come on ‘everyday items’

The products that Target customers will soon see lower prices on include what Target describes as “everyday items,” including:

Milk
Meat
Bread
Soda
Fresh fruit
Vegetables
Snacks
Yogurt
Peanut butter
Coffee
Diapers
Paper towels
Pet food

Target said in some stores around the country, the price of a frozen pizza has already dropped to $3.99 from $4.19, for example.

A container of Clorox scented wipes is now $4.99 compared to $5.79, according to the company.

Target said the lowered prices will be found online and on the Target app as well as in stores.

Where else can shoppers find savings?

Target’s announcement of lower prices comes just weeks after Aldi announced its own price reduction on more than 250 grocery items.

The retail chain said customers will see lower prices this summer on items including meat, bread, organic avocado oil, organic granola bars and dried cranberries.

McDonald’s also announced a price reduction this month in the form of a $5 value meal that will hit menus in time for summer.

The fast food chain plans to offer a bundle that includes four items: a McDouble or McChicken sandwich, small fries, small soft drink and a four-piece Chicken McNuggets for just $5.

Overall, data shows that grocery prices are falling for the first time in one year.

In April, the food at home index — food purchased at grocery stores – decreased by 0.2%, according to the U.S. Department of Labor consumer price index findings.

Some staple food at home products, including bread, poultry and eggs, fell in April compared to a year ago, the CPI data showed.

Prices for other items like breakfast sausage and ice cream, however, increased at a pace near the level of overall inflation.

Red Lobster voluntarily files for Chapter 11 bankruptcy

May 21, 2024 by WDNY Radio

(NEW YORK) — Red Lobster has voluntarily filed for Chapter 11 bankruptcy, according to a recent press release shared with ABC News.

The largest seafood chain in the U.S., home to Cheddar Bay biscuits, Lobsterfest, Ultimate Endless Shrimp and more, filed the legal action on May 19 in the U.S. Bankruptcy Court for the Middle District of Florida, where the Orlando-based restaurant group is headquartered.

“The Company intends to use the proceedings to drive operational improvements, simplify the business through a reduction in locations, and pursue a sale of substantially all of its assets as a going concern,” Red Lobster said in part of its bankrupty filing.

“This restructuring is the best path forward for Red Lobster. It allows us to address several financial and operational challenges and emerge stronger and re-focused on our growth. The support we’ve received from our lenders and vendors will help ensure that we can complete the sale process quickly and efficiently while remaining focused on our employees and guests,” Red Lobster CEO Jonathan Tibus added about the bankrupty filing.

Red Lobster, which was founded in 1968, has been struggling financially and closed multiple locations this May, shuttering at least 99 restaurants in 27 states. But the seafood chain said its remaining open restaurants will continue to operate “as usual.”

The restaurant chain claimed its Ultimate Endless Shrimp promotion, which was launched nearly two decades ago and offered customers all-you-can shrimp dishes for just $20, has taken a major toll to its financial bottom line.

Is it too late to join the bull market? Experts weigh in.

May 20, 2024 by WDNY Radio

(NEW YORK) — The blazing hot stock market seems to set new records just about every day.

The Dow Jones Industrial Average stands above 40,000 for the first time in history, after climbing nearly 20% since October. Over that period, the S&P 500 and the Nasdaq have each soared even higher, climbing 23% and 27% respectively.

The market rally means a windfall for people with stock holdings but it poses a quandary for those on the sidelines: Is it time to jump in or too late to reap the gains?

Experts who spoke to ABC News encouraged investors to take advantage of the market upswing, saying the major indexes have room to rise even further.

The confidence stems from the nation’s sunny economic outlook, they added, as the Federal Reserve stands poised to make interest rate cuts that could boost an already robust economy. However, they cautioned, stubborn inflation or an economic downturn could bring losses.

“This is a pretty awesome environment to own stocks in right now,” Tom Essaye, president of financial data firm Sevens Report Research, told ABC News. “There is still time to get in.”

The economy is performing well on many key metrics. Unemployment stands near a 65-year low, while economic growth has remained solid and consumer spending has shown resilience.

All of these positive indicators have added up to strong corporate profits, the lifeblood of the stock market. “Growth is good and corporate earnings are good,” Essaye said.

Strong stock market performance, however, depends on where company results and economic output are headed rather than where they stand at the present time, experts said.

Fortunately, many observers hold an optimistic outlook about the coming months, since the Fed appears to be on the verge of interest rate cuts that could deliver a jolt to the economy.

In recent months, the Fed had all but abandoned its previous forecast of three quarter-point rate cuts this year. But a slowdown of price hikes offered hope of rekindling those plans.

Inflation data released last week showed that price increases slowed slightly from the annual rate recorded in the previous month, ending a surge of inflation that stretched back to the beginning of 2024.

“Front and center is what the Fed is going to do,” Marc Dizard, chief investment strategist at PNC Asset Management Group. “There is a bias here that they want to cut rates, which the market is really liking.”

Optimism about the stock market also owes to enthusiasm about the impact of artificial intelligence, experts said.

Major stock indexes drew a bump in recent months from investors favorable toward the newly prominent technology. Those gains were concentrated primarily in a handful of tech giants, known as the so-called “Magnificent 7”: Alphabet, Amazon, Apple, Meta, Microsoft, Tesla and Nvidia.

Shares of Nvidia have climbed nearly 120% since October; Microsoft has jumped almost 35% over that period.

Ed Yardeni, the president of market advisory firm Yardeni Research and former chief investment strategist at Deutsche Bank’s U.S. equities division, said adoption of AI in the coming months and years would help grow the economy and send the stock market higher.

“The market is right to get excited about technological innovations like artificial intelligence, robotics and automation,” Yardeni said. “I think those technologies will boost productivity and productivity boosts real economic growth.”

Dizard, of PNC, said the stock market retains the capacity to rise between 5% and 8%. While Essaye, of Sevens Report Research, said the S&P 500 could increase another 3% or more.

Meanwhile, Yardeni offered a longer-term view, saying he expects the major stock indexes to climb 50% by 2030.

Still, the experts warned of potential outcomes that could not only blunt future gains but incur significant losses.

Stubborn inflation could force the Fed to shift its posture, holding rates elevated for longer than expected or even raising them altogether.

“You could see a curveball,” Dizard said. “That’s something investors need to be cautious about.”

Some economic indicators, meanwhile, have already shown signs of a slowdown. The labor market has continued to add jobs this year but at a slower pace than 2023. The economy grew at the outset of 2024 but cooled off from the final stretch of last year.

“An economic slowdown is the number one thing everybody has to worry about,” Essaye said, predicting that such an outcome could bring a market decline of 10% or more.

Even after noting risks, Dizard struck a positive note. “There is momentum to the upside,” he said.

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