By Ankika Biswas and Lisa Pauline Mattackal
(Reuters) – The Nasdaq and U.S. stock indexes rose on Tuesday, boosted by gains in Tesla (NASDAQ:TSLA) and mega-cap stocks, while the Dow was flat as investors assessed comments by Federal Reserve Chairman Jerome Powell on the need for more evidence before cutting rates.
Tesla rose 8.6% to its highest level since early January after the electric vehicle maker reported a smaller-than-expected 5% drop in vehicle deliveries in the second quarter, pushing the consumer discretionary sector to the top of the S&P 500 sector indexes.
Mega-cap stocks like Apple (NASDAQ:) rose 1%, while amazon.com (NASDAQ:) and Alphabet (NASDAQ:) also rose, and U.S. Treasury yields fell across the board.
Powell told a panel that recent economic data represents “significant progress,” though he noted that the Fed needs to see more before changing policy. Meanwhile, Chicago Fed President Austan Goolsbee said he sees some “warning signs” of economic weakness and that the central bank’s goal is to reduce inflation without stressing the labor market.
“What the Fed really wants to see is a further rise in unemployment and then a slowdown in terms of new job creation,” said Genter Capital Management CEO Dan Genter, who also added that the recent moderation in inflation could be a green light for the Fed to start considering rate cuts.
The Job Openings and Labor Turnover Survey, or JOLTS, showed job openings rose in May after posting outsized declines in the previous two months, but layoffs picked up amid a slowdown in economic activity.
The data is the first in a series of US employment reports this week, including the closely watched June non-farm payrolls release on Friday, which will be crucial in assessing whether the US labour market remains resilient in a context of decades-high interest rates.
With recent data indicating a renewed moderation in inflation and some signs of economic weakness, market participants are maintaining their bets on around two interest rate cuts by year-end, and see a 69% chance of an easing starting in September, according to LSEG FedWatch data.
However, ai chip leader Nvidia (NASDAQ:NV) fell 2%, and the trend in other chip stocks was largely mixed.
At 11:50 a.m. ET, the index was up 20.47 points, or 0.05%, at 39,189.99, the S&P 500 was up 9.20 points, or 0.17%, at 5,484.29, and the index was up 59.95 points, or 0.34%, at 17,939.25.
Trading volumes are expected to be low throughout the week, with the stock market closing early on Wednesday and remaining closed all day on Thursday for U.S. Independence Day.
Among others, the US share price of Novo Nordisk (NYSE:) lost 2% after US President Joe Biden and Senator Bernie Sanders called on the Danish pharmaceutical company to reduce the prices of its drugs Ozempic and Wegovy. Its rival Eli Lilly (NYSE:) fell 1.8%.
Paramount Global rose 2.1% after billionaire Barry Diller's digital media conglomerate IAC was exploring a bid to take control of the media giant.
Advancing stocks outnumbered declining stocks by a ratio of 1.58 to 1 on the New York Stock Exchange and 1.02 to 1 on the Nasdaq.
The S&P index posted eight new 52-week highs and four new lows, while the Nasdaq posted 28 new highs and 131 new lows.
!function(f,b,e,v,n,t,s){if(f.fbq)return;n=f.fbq=function(){n.callMethod? n.callMethod.apply(n,arguments):n.queue.push(arguments)};if(!f._fbq)f._fbq=n;n.push=n;n.loaded=!0;n.version=’2.0′;n.queue=();t=b.createElement(e);t.async=!0;t.src=v;s=b.getElementsByTagName(e)(0);s.parentNode.insertBefore(t,s)}(window, document,’script’,’https://connect.facebook.net/en_US/fbevents.js’);