(New York) Stock indices edged higher in a shortened trading day on Monday as momentum slowed on Wall Street after the strong first half of the year.
The S&P 500 rose 5.21 points, or 0.1%, to 4455.59 and hit its highest level since April 2022. The Dow Jones index of major industrial stocks gained 10.87 points, less up 0.1%, to 34,418.47, and the NASDAQ Composite Index added 28.85, or 0.2%, to 13,816.77.
Tesla was the most powerful force that lifted the S&P 500 after the market heavyweight soared 6.9%. The company said over the weekend that the number of vehicles delivered in the spring jumped 83% from a year earlier. This was more than analysts expected, although price declines may have driven some of the gains. Investors will see how much of an impact the discounts will have on earnings when Tesla reports earnings on July 19.
Rivian Automotive, another electric vehicle company, jumped 17.4% after also reporting spring deliveries that beat analysts’ expectations.
On the losing side on Wall Street was Apple, which slipped 0.8% after becoming the first US company on Friday to end a trading day with a total market value of more than $3 trillion.
Otherwise, markets have been relatively quiet after a surge where the S&P 500 has climbed in six of the past seven weeks to send the index up nearly 16% in the first half.
Trading on U.S. stock markets ended at 1 p.m. They will remain closed on Tuesday for Independence Day.
The Toronto Stock Exchange remained closed on Monday for Canada Day.
The market’s gains so far this year have come as the US economy has defied many recession forecasts. The labor market, in particular, has remained strong despite much higher interest rates intended to reduce inflation.
One sector of the economy that has faltered is manufacturing, and a report on Monday showed it contracted in June for an eighth consecutive month. The reading from the Institute for Supply Management (ISM) was worse than economists expected.
“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 consolation in the ISM report was that inflationary pressures are absent, but that’s little comfort when earnings continue to be at risk. »
Still, investors are hopeful that strength in other areas will keep the economy from slipping into recession, which would help support corporate earnings. A report later this week will go a long way to underscore or weaken this argument.
On Friday, the US government will release its latest monthly update on economy-wide hiring, as well as worker wage increases. This is one of the last big data pieces left before the Federal Reserve’s next interest rate policy meeting.
The Fed has already raised rates by 5 percentage points from virtually zero at the start of last year in hopes of bringing inflation under control. But there is reason to believe that it could be nearing the end of the increases, which would mean less additional pressure on the economy and financial markets. Many on Wall Street expect it to raise rates on July 26.
Investors’ hope is that this will be the last increase of the Fed cycle. The Fed, meanwhile, has hinted that it may raise rates twice more this year.
Besides Friday’s jobs report, the other big data that could change the Fed’s thinking ahead of its next meeting is likely the monthly inflation update.
In the bond market, yields fluctuated on weaker than expected data from the manufacturing sector. The 10-year Treasury yield recovered from an initial decline to hit 3.85% from 3.84% on Friday night. The two-year yield, which moves more in line with Fed expectations, also pared losses to 4.92% from 4.90% Friday night.
European markets ended slightly lower. Japan’s Nikkei 225 rose 1.7% to add to its strong run to start the year. Stocks rose across much of the rest of Asia, with Hong Kong up 2.1% and South Korea up 1.5%.