Tesla lift stocks to a higher close in light pre-holiday trading

  • Shares of automaker Tesla surged ahead of second-quarter vehicle delivery data.
Tesla
Shares of automaker Tesla surged ahead of second-quarter vehicle delivery data. (AFP)
Tesla
Shares of automaker Tesla surged ahead of second-quarter vehicle delivery data.

Megacap growth stocks led by Apple and Tesla lifted the tech-heavy Nasdaq to a higher close on Monday, while the Dow and the S&P 500 also eked out slight gains in light pre-holiday trading.

Investors were waiting for U.S. labour market data due later this week for clues about the interest rate outlook.

Apple, Microsoft and Amazon.com rose, boosting the Nasdaq.

"The most important driver of earnings is GDP and the economy still looks very healthy to us," said Ben Snider, a senior equity strategist at Goldman Sachs Research.

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"We're forecasting economic growth this year in the U.S. - over trend - above 2%, so underlying revenue growth still looks strong. On top of GDP, profit margins seem to be recovering after a pretty rough couple of years."

A quarter of earnings on the S&P 500 index comes from the largest technology stocks, which also look strong, he said.

Shares of automaker Tesla surged ahead of second-quarter vehicle delivery data.

Wells Fargo added Tesla stock to its third-quarter "Tactical Ideas list" yet kept its "underweight" rating and expressed concerns of declining delivery growth and a risk of price cuts.

Shares of semiconductor makers Advanced Micro Devices and Arm Holdings fell, pulling the Philadelphia SE Semiconductor index close to a one-week low.

Real estate stocks, also seen as a bond proxy, dropped, as U.S. Treasury yields jumped to multi-week highs. But higher yields often boost bank profits so the S&P 500 banks index jumped to its highest in more than a month.

JP Morgan Chase shares were at an all-time high after the biggest U.S. bank on Friday hiked its dividend to $1.25 a share from $1.15. Its board also authorized $30 billion in new share buybacks, effective July 1.

Trading volumes were thin, with the equity market set to shut on Thursday for U.S. Independence Day, and thin volumes are expected all week.

Manufacturing PMI data from the Institute for Supply Management showed manufacturing contracted for a third straight month in June, while prices paid dropped to a six-month low in an encouraging sign for the U.S. Federal Reserve's battle with inflation.

Traders have stuck to their bets of around two interest rate cuts this year, starting from September, LSEG FedWatch showed.

Also scheduled for the week are JOLTS job openings data on Tuesday, and ADP employment, factory orders, ISM services PMI data and minutes of the Fed's latest policy meeting on Wednesday. Non-farm payroll data are due on Friday.

Fed New York President John Williams noted he still believes price pressures are moderating back to the 2% target.

According to preliminary data, the S&P 500 gained 14.61 points, or 0.26%, to end at 5,474.71 points, while the Nasdaq Composite gained 144.37 points, or 0.83%, to 17,876.26. The Dow Jones Industrial Average rose 46.25 points, or 0.12%, to 39,165.11.

On Friday, the Nasdaq and the S&P 500 notched their third straight quarterly gains, with the tech-heavy index doing so for the first time in three years. However, the Dow's quarterly decline raised concerns about the need for greater diversification in investor holdings.

Chewy dropped, reversing sharp early gains, after stock influencer Keith Gill, also known as "Roaring Kitty", disclosed a 6.6% stake in the pet products retailer.

First Published Date: 02 Jul 2024, 01:31 AM IST
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