Update at 4:22 PM EDT by Rob Lenihan
Stocks ended in the green Tuesday, with the S&P 500 and Nasdaq closing at record highs, after Federal Reserve Chairman Jerome Powell said the U.S. is back on a "disinflationary path."
The Dow Jones Industrial Average gained 0.41%, or 162.33, to finish the session at 39,331.85.
The S&P 500 rose 0.62% to end at 5,509.01, closing over 5,500 for the first time and notching a record at the same time, while the tech-heavy Nasdaq rose 0.84% to finish at a record 18,028.76.
Powell said that the U.S. is back on a “disinflationary path,” but policymakers need more data before cutting interest rates to verify that recent weaker inflation readings provide an accurate picture of the economy, Reuters reported.
Data for May showed the Fed's preferred measure of inflation did not increase at all that month, while the 12-month rate of price increases has ebbed to 2.6%, still above the U.S. central bank's 2% target but on the way down after a scare in the first months of the year.
"We just want to understand that the levels that we're seeing are a true reading on what is actually happening with underlying inflation," Powell said at a monetary policy conference in Portugal sponsored by the European Central Bank.
Updated at 12:54 AM EDT
Mid-day hold
Stocks are holding onto their earlier gains heading into the final hours of the trading day, with the S&P 500 up .07% and the Nasdaq rising 0.24% in relatively thin trading volumes. The Dow was last seen 0.14% lower.
Rivian Automotive (RIVN) shares, along with Tesla, are the market's two most-active stocks, with the former rising 3.4% on 41.3 million shares of volume and the latter up 9% on 141.5 million in volume following its stronger-than-expected second quarter delivery figures.
Related: Analysts overhaul Rivian stock outlook after Volkswagen deal
Updated at 10:04 AM EDT
Jolted
The Labor Department said overall job openings were pegged at 8.14 million in May, up from the revised 7.919 million tally in April and just ahead of the Street's 7.9 million forecast.
The Jolts report, the first of a series of labor market data releases this week, suggests underlying strength in the job market that could complicate the Fed's attempts to further slow inflation into the summer months.
May JOLTS jumps a bit pic.twitter.com/8PPBRG8Xot
— Mike Zaccardi, CFA, CMT 🍖 (@MikeZaccardi) July 2, 2024
Updated at 9:48 AM EDT
Powell sees progress
Stocks turned modestly higher almost immediately after comments from Fed Chair Powell that indicated he and his colleagues have made "quite a bit of progress" on inflation even as he repeated his view that more data will be needed to ensure confidence that it's returning to the central bank's 2% target.
Speaking during a panel discussion with ECB President Christine Lagarde in Portugal, Powell also said that a disinflation trend has resumed in the world's biggest economy.
Benchmark 10-year note yields eased 2 basis points to 4.418% as Powell spoke, with 2-year notes down 1 basis point to 4.725%.
Stocks are mixed, with the S&P 500 down 2 points and the Nasdaq last marked 15 points higher on the session.
Powell sounding just a touch more dovish than he has of late here - "quite a bit of progress", back on disinflation path, etc.
— Michael Brown (@MrMBrown) July 2, 2024
Updated at 9:37 AM EDT
Soft open
Stocks pared some earlier declines in the opening minutes of trading, with the S&P 500 down 9 points, or 0.17% and the Nasdaq off 53 points, or 0.3%. The Dow was last seen 15 points lower.
S&P 500 Opening Bell Heatmap (Jul. 02, 2024)$SPY -0.25%🟥$QQQ -0.20%🟥$DJI -0.17%🟥$IWM -0.02%🟥 pic.twitter.com/wAsDZbvGUD
— Wall St Engine (@wallstengine) July 2, 2024
Updated at 9:16 AM EDT
Tesla surprise
Tesla posted a modestly better-than-expected second quarter delivery total of 444,000 new cars Tuesday, despite a big slump in China sales, sending its shares firmly higher in premarket trading.
Tesla delivered 422,405 units of its Model 3 and Model Y, with a further 21,551 units of the Model S, Model X and Cybertruck, with the overall total down around 4.7% from the same period last year.
Tesla shares were marked 5.3% higher in premarket trading to indicate an opening bell price of $221.29 each.
$TSLA
— Tsla Chan (@Tslachan) July 2, 2024
BREAKING: 2024 Q2 Tesla Produc. & Deliv. ❤️🔥
====================
Produc. Deliv.
Q1. 433,371. 386,810.
Q2. 410,831. 443,956.
==================== pic.twitter.com/09Qs1aAXOD
Updated at 8:31 AM EDT
Weighty remarks
Eli Lilly (LLY) shares slumped lower in premarket trading, with Danish rival Novo Nordisk (NVO) sliding into the red as well, following comments from President Joe Biden that suggested his administration would force price cuts on GLP-1 weight loss treatments such as Wegovy and Ozempic.
In a piece published in USA Today with independent Senator Bernie Sanders, Biden said that if Novo Nordisk and "other pharmaceutical companies refuse to substantially lower prescription drug prices in our country and end their greed, we will do everything within our power to end it for them."
Eli Lilly shares were marked 2% lower in premarket trading at $896.00 each, while Novo Nordisk's U.S.-listed shares fell 2.9% to $141.17 each.
$LLY $NVO President Biden: Novo Nordisk, Eli Lilly must stop ripping off Americans with high drug priceshttps://t.co/DTpJpHf1gl
— Michelle Solly (@MSollender) July 2, 2024
Stock Market Today
Stocks ended higher on Monday, powered largely by gains in megacap tech stocks, which shrugged off a sharp drop in Treasury bond prices in a move that lifted 10-year note yields to the highest levels in more than a month.
Related: Analyst resets Nvidia stock price target after trillion-dollar Q2
Benchmark 10-year yields were last checked at 4.459%, with 2-year notes pegged at 4.762%, heading into Powell's speech at the European Central Bank's traditional summer forum in Portugal, which is expected expected to start at around 9:30 am Eastern Time.
The U.S. dollar index, which tracks the greenback against a basket of six global currencies, was marked 0.12% higher at 106.034.
The Labor Department will also release its Job Openings and Labor Market Turnover report, better-known as Jolts, at 10:00 am Eastern, with economists looking for an overall tally of around 7.96 million.
On Wall Street, stocks are looking at a firmly lower open, thanks in part to the ongoing rise in Treasury yields, with futures contracts tied to the S&P 500 suggesting a 23 point opening-bell decline.
Futures linked to the Dow Jones Industrial Average suggest a 130 point pullback, with the Nasdaq called 98 points lower to start the Tuesday session.
Tesla (TSLA) shares were marked 1.5% lower in premarket trading at $209.86 each, following a 6% gain yesterday, as investors awaited details of the carmaker's second-quarter-delivery figures due prior to the opening bell.
Related: Analyst puts Tesla stock on key ideas list as Q2 deliveries loom
Nvidia (NVDA) shares were also on the back foot, falling 1.3% to $122.74 each, with Microsoft (MSFT) , Apple (AAPL) and Alphabet (GOOGL) all trading in the red.
More Wall Street Analysts:
- Analyst updates Oracle stock price target after earnings
- Analyst reboots Trade Desk stock price target after Netflix deal
- Analysts adjust Micron stock price target ahead of earnings
In overseas markets, Europe's Stoxx 600 slipped 0.56% following June inflation data that showed only a modest easing in consumer price pressures last month, as well as a steady reading of 2.9% for core inflation. The report added fuel to hawkish comments from ECB President Christine Lagarde on Monday.
Britain's FTSE 100, meanwhile, was last seen 0.27% lower in London with Thursday's national elections firmly in focus.
Overnight in Asia, the yen hit a fresh 38-year low of 161.88 against the U.S. dollar, helping the Nikkei 225 rise more than 1.1% in Tokyo and reclaim the 40,000-point mark for the first time in two months.
The regionwide MSCI ex-Japan benchmark, meanwhile, fell 0.58% into the close of trading.
Related: Veteran fund manager picks favorite stocks for 2024
