* Tesla rises after second-quarter delivery data.
* Paramount Global Gains on Possible IAC Offer
* Fed Chair Powell Says Risks Are Becoming More Balanced
* Job openings increase in May
* Lilly Drops as Biden Calls for Lower Obesity Drug Prices
* Indexes up: Dow 0.2%, S&P 0.4%, Nasdaq 0.7%
(Updates at 2.20pm EDT/1820 GMT)
July 2 (Reuters) – Wall Street’s main stock indexes rose on Tuesday, boosted by gains in Tesla and megacap growth stocks, but volume was light ahead of the July Fourth holiday and the expected release of June nonfarm payrolls data on Friday.
Tesla jumped 8.8% to its highest level since early January after the electric vehicle maker reported a smaller-than-expected 5% decline in second-quarter vehicle deliveries, propelling the consumer discretionary sector to the top of the S&P 500 sector indexes.
Megacap stocks like Apple rose 1.4%, while Amazon.com rose 1.4% and Alphabet also rose, with U.S. Treasury yields falling across the board.
U.S. Federal Reserve Chairman Jerome Powell told a panel that recent economic data represented “significant progress,” though he stressed that the Fed needs to see more before changing policy. Meanwhile, Chicago Fed President Austan Goolsbee said he saw some “warning signs” of economic weakness and that the central bank’s goal was to reduce inflation without stressing the labor market.
“What the Fed really wants to see is a further spike in unemployment and then a slowdown in job creation,” said Genter Capital Management CEO Dan Genter, who added that the recent moderation in inflation could be a green light for the Fed to start considering rate cuts.
The Job Openings and Turnover Survey, or JOLTS, showed that job openings increased in May after declining too much in the previous two months, but layoffs increased as economic activity slowed.
The data is the first in a series of U.S. jobs reports this week, most notably Friday’s closely watched June nonfarm payrolls, which will be crucial in assessing whether the U.S. labor market remains resilient amid decades-high interest rates.
With recent data pointing to renewed moderation in inflation and some signs of economic weakness, market participants are maintaining their bets on about two interest rate cuts by the end of the year, seeing a 69% chance of easing starting in September, according to FedWatch data from LSEG.
However, AI chip leader Nvidia fell 1.4%, while other chip stocks were largely mixed. Nvidia is up 148% year-over-year.
Investors are divided over the sustainability of the market rally, in which the S&P 500 Index has risen 14.75% in the first half of the year.
“We see another 10% before the end of the year, which is pretty scary because if we’re at 5,500 or so (on the S&P 500), 10% means we really need to see earnings justify that kind of multiple,” said John Lynch, chief investment officer at Comerica Wealth Management.
Barry Bannister, chief U.S. equity strategist at Stifel, said in a note that he expects the S&P 500 could correct to 4,750 by the end of the third quarter as GDP slows but inflation moderately recovers in the second half of 2024.
As of 2:20 p.m. EDT, the Dow Jones Industrial Average was up 82.64 points, or 0.21 percent, at 39,252.16, the S&P 500 was up 20.75 points, or 0.38 percent, at 5,495.84 and the Nasdaq Composite was up 115.67 points, or 0.65 percent, at 17,994.97.
Trading volume is expected to be light throughout the week, with the stock market closing early on Wednesday and remaining closed all day on Thursday for U.S. Independence Day.
Elsewhere, Novo Nordisk’s U.S. share price fell 1.7% after U.S. President Joe Biden and Senator Bernie Sanders called on the Danish drugmaker to cut prices for its drugs Ozempic and Wegovy. Rival Eli Lilly fell 0.7%.
Paramount Global rose 3.8% after news that billionaire Barry Diller’s digital-media conglomerate IAC was exploring a bid to take control of the media giant.
Rising stocks outnumbered falling stocks by a ratio of 1.63 to 1 on the NYSE.
The S&P 500 posted 13 new 52-week highs and four new lows, while the Nasdaq Composite posted 35 new highs and 167 new lows. (Reporting by Ankika Biswas and Lisa Mattackal in Bengaluru and Saeed Azhar in New York; Editing by Maju Samuel and Matthew Lewis)
