Wall Street tacks on a bit more to its big run for the first half of the year
Stocks edged higher in a shortened trading day Monday as momentum slowed on Wall Street after its powerful rally through the first half of the year.
The Standard & Poor’s 500 index rose 5.21 points, or 0.1%, to 4,455.59 and reached its highest level since April 2022. The Dow Jones industrial average gained 10.87 points, or less than 0.1%, to close at 34,418.47, while the Nasdaq composite advanced 28.85 points, or 0.2%, to 13,816.77.
Tesla was the strongest force lifting the S&P 500 upward after the market heavyweight climbed 6.9%. The company said over the weekend that the number of vehicles it delivered during the spring surged 83% from a year earlier. That was more than analysts expected, though cuts to prices may have driven some of the gains. Investors will see how much the discounts hit its profit when Tesla reports earnings July 19.
Rivian Automotive, another electric-vehicle company, jumped 17.4% after it also reported deliveries for the spring that topped analysts’ expectations.
Elon Musk has been slashing Tesla prices in his quest to seize even more of America’s SUV market.
On the losing end of Wall Street was Apple, which slipped 0.8% after becoming the first U.S. stock Friday to finish a trading day with a total value of more than $3 trillion.
Much of the rest of the market was relatively quiet after a rally in which the S&P 500 climbed in six of the last seven weeks to send the index up nearly 16% for the first half of the year.
Trading in the U.S. stock market ended at 1 p.m. Eastern time and the market will remain closed Tuesday in observance of Independence Day.
The market’s gains this year have come as the U.S. economy has defied many predictions for a recession. The job market in particular has remained solid despite much higher interest rates meant to undercut inflation.
One area of the economy that has faltered is manufacturing, and a report Monday morning showed it contracted in June for an eighth straight month. The reading from the Institute for Supply Management was worse than economists had expected.
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“Manufacturing is stuck in the mud and it looks like more rain is coming,” said Brian Jacobsen, chief economist at Annex Wealth Management. “The only solace in the ISM report was that inflationary pressures are absent, but that’s little comfort when earnings continue to be at risk.”
Nevertheless, traders hope that strength in other areas of the economy will keep it out of a recession, which would support corporate profits. A report later this week will go a long way toward underscoring or weakening that argument.
On Friday, the U.S. government will report its latest monthly update on hiring across the economy, as well as how much wages are rising for workers. It’s one of the last big pieces of data left before the Federal Reserve meets next on interest rate policy.
The Fed has already hiked rates by a mammoth 5 percentage points from virtually zero early last year in hopes of getting inflation under control. But it’s hinted that it may be close to the end of the increases, which would mean less added pressure on the economy and financial markets. Much of Wall Street expects it to raise rates July 26.
The hope among traders is that will be the Fed’s final increase of the cycle. The Fed, meanwhile, has hinted that it could raise rates twice more this year.
Other than Friday’s jobs report, the other data that could change the Fed’s thinking before its next meeting probably are the latest updates on monthly inflation.
The Federal Reserve kept its key interest rate unchanged Wednesday after having raised it 10 straight times to combat high inflation.
In the bond market, yields swung after the weaker-than-expected data on manufacturing. The yield on the 10-year Treasury recovered from an initial drop to rise to 3.86% from 3.84% late Friday. It helps set rates for mortgages and other important loans.
The two-year yield, which moves more on expectations for the Fed, also pared losses to rise to 4.92% from 4.90%.
European markets ended modestly lower. Japan’s Nikkei 225 rose 1.7% to add to its huge run in the first half of this year. Stocks rose across much of the rest of Asia, with Hong Kong up 2.1% and South Korea up 1.5%.
AP writers Yuri Kageyama and Matt Ott contributed to this report.
