US close: Tesla, Powell comments drive markets to new highs

2nd Jul 2024 22:19

(Sharecast News) - Despite a mediocre start, US stock markets rallied into the afternoon with the S&P 500 finishing above the 5,500 mark for the first time and the S&P 500 notching its 22nd record close of the year.

Gains were helped by a 10% surge in the share price of Tesla along with positive comments from Federal Reserve chair Jerome Powell on the economic outlook.

The Dow finished up 0.4% at 39,331.85, while the S&P 500 rose 0.6% to 5,509.01 and the Nasdaq jumped 0.8% to 18,028.76.

Speaking at the European Central Banking Forum, Powell said the US central bank has made "quite a bit of progress" on inflation but reiterated that the Fed needed more confidence of things easing further before cutting interest rates.

While stopping short of giving a date for the first rate cut, Powell acknowledged that the jobs market was beginning to loosen. "You can see the labor market is cooling off, appropriately so, and we're watching it very carefully," he said.

Meanwhile, the president of the Chicago Fed, Austan Goolsbee suggested the central bank could potentially cut rates in the coming months amid "warning signs" of an economic slowdown, saying: "You only want to stay this restrictive for as long as you have to."

"Markets' current thinking is that any sign of weakness in the American jobs market could encourage the Fed to make the long-awaited first cut in US interest rates from the 5.5% mark reached last summer," said Russ Mould, investment director at AJ Bell. "The theory is that lower returns on cash and lower bond yields will persuade investors to see a higher return in different, albeit riskier, asset classes, including equities."

Economic data was thin on the ground on Tuesday with the JOLTS survey for May the only major release of the day. US job openings increased by 2.8% month-on-month to reach 8.14m, surprising economists who had forecast a decline from April's previous estimate of 8.059m to 7.91m.

Hiring meanwhile was up by 2.5% to 5.77m and separations (or 'quits'), which denote confidence in prospects for the jobs markets, rose by 1.6% to 5.422m.

Tesla jumps

Electric car giant Tesla reported that deliveries had fallen 4.8% to 443,956 in the second quarter, but that didn't stop the stock from surging to $231.26 - its highest in nearly six months. This was the second straight quarter of falling sales, but higher than the 438,019 expected by the market.

In contrast, sector peer Polestar fell after reporting a loss of $274.3m for its first quarter, compared with $37.7m a year earlier.

Biopharma groups Eli Lilly and Novo Nordisk were being weighed down by comments from President Biden about drug companies' "unconsciousably high prices".

Paramount Global rose strongly on the back of CNBC reports that it was in talks about a possible merger of its Paramount+ streaming platform, with Warner Bros Discover among the parties named.

Dow Jones - Risers

Visa Inc. (V) $268.23 1.90%

JP Morgan Chase & Co. (JPM) $208.83 1.65%

Apple Inc. (AAPL) $220.27 1.62%

International Business Machines Corporation (CDI) (IBM) $177.30 1.26%

3M Co. (MMM) $101.57 1.00%

American Express Co. (AXP) $235.97 0.92%

Walmart Inc. (WMT) $68.07 0.87%

Intel Corp. (INTC) $31.07 0.75%

Unitedhealth Group Inc. (UNH) $498.15 0.73%

Procter & Gamble Co. (PG) $163.95 0.73%

Dow Jones - Fallers

Verizon Communications Inc. (VZ) $41.10 -1.53%

Nike Inc. (NKE) $76.04 -1.03%

McDonald's Corp. (MCD) $247.79 -0.88%

Boeing Co. (BA) $185.42 -0.69%

Cisco Systems Inc. (CSCO) $47.28 -0.51%

Caterpillar Inc. (CAT) $327.76 -0.40%

Home Depot Inc. (HD) $334.97 -0.36%

Johnson & Johnson (JNJ) $145.98 -0.28%

Coca-Cola Co. (KO) $63.15 -0.21%

Merck & Co. Inc. (MRK) $127.72 -0.14%

S&P 500 - Risers

Advanced Micro Devices Inc. (AMD) $164.31 4.20%

Carmax Inc. (KMX) $73.26 2.91%

Intercontinental Exchange Inc (ICE) $140.82 2.84%

Charter Communications Inc. (CHTR) $303.50 2.53%

Msci Inc. (MSCI) $490.54 2.53%

Copart Inc. (CPRT) $54.69 2.51%

Archer-Daniels-Midland Co. (ADM) $62.13 2.46%

W.W. Grainger Inc. (GWW) $918.81 2.43%

Bank of America Corp. (BAC) $40.93 2.30%

Ulta Salon, Cosmetics & Fragrance Inc. (ULTA) $393.02 2.24%

S&P 500 - Fallers

Nektar Therapeutics (NKTR) $1.17 -4.10%

CenturyLink Inc. (LUMN) $1.07 -3.60%

CF Industries Holdings Inc. (CF) $70.83 -3.48%

Tapestry Inc. (TPR) $40.54 -3.45%

Incyte Corp. (INCY) $59.02 -3.04%

Kohls Corp. (KSS) $21.28 -2.79%

AbbVie Inc (ABBV) $165.96 -2.59%

Everest Group (EG) $369.63 -2.36%

Macy's Inc. (M) $17.88 -2.36%

Leggett & Platt Inc. (LEG) $11.15 -2.10%

Nasdaq 100 - Risers

Tesla Inc (TSLA) $231.26 10.20%

Qurate Retail Inc. (QRTEA) $0.68 9.72%

Sirius XM Holdings Inc (SIRI) $3.10 7.64%

Charter Communications Inc. (CHTR) $303.50 2.53%

Ulta Salon, Cosmetics & Fragrance Inc. (ULTA) $393.02 2.24%

Western Digital Corp. (WDC) $78.05 2.19%

O'Reilly Automotive Inc. (ORLY) $1,037.06 2.04%

Paypal Holdings Inc (PYPL) $58.97 2.01%

Texas Instruments Inc (TXN) $198.42 1.96%

Cadence Design Systems Inc. (CDNS) $316.78 1.88%

Nasdaq 100 - Fallers

Incyte Corp. (INCY) $59.02 -3.04%

NetEase Inc. Ads (NTES) $93.96 -2.59%

Wynn Resorts Ltd. (WYNN) $86.33 -1.53%

Nvidia Corp. (NVDA) $122.67 -1.31%

Biogen Inc (BIIB) $228.82 -1.27%

Regeneron Pharmaceuticals Inc. (REGN) $1,044.66 -1.17%

Monster Beverage Corp (MNST) $49.34 -1.12%

PACCAR Inc. (PCAR) $100.91 -0.91%

Hasbro Inc (HAS) $57.06 -0.80%

Vodafone Group Plc ADS (VOD) $8.80 -0.79%