U.S. stocks hovered near their record highs on Tuesday in a relatively calm trading session on Wall Street.
The S&P 500 edged up 0.1% in the afternoon, remaining slightly below its all-time high set two weeks prior. The Dow Jones Industrial Average fell by 62 points, or 0.2%, as of 12:56 p.m. Eastern time, while the Nasdaq composite increased by 0.3%, reaching a new record.
Tesla surged 8.8%, leading the market after reporting a smaller-than-expected drop in spring sales. The electric vehicle (EV) giant delivered 443,956 vehicles during the second quarter, surpassing the analyst consensus estimate of 439,302 deliveries, according to Bloomberg data.
Conversely, declines in some major stocks offset Tesla’s gains. Nvidia, a prominent player in artificial intelligence, dropped 1.1%, making it the biggest drag on the S&P 500. Eli Lilly fell 1.8% following President Joe Biden’s critique in USA Today of the company’s high prices for weight loss and diabetes treatments.
In the bond market, Treasury yields dipped as investors interpreted remarks from Federal Reserve Chair Jerome Powell as signaling potential interest rate cuts later this year. Powell acknowledged improvements in inflation data, despite earlier high readings, stating the need to ensure current levels accurately reflect underlying inflation.
Wall Street Hopes Inflation Will Slow Down
Wall Street hopes for a slowdown in inflation to prompt the Fed to reduce its main interest rate, currently at its highest in over two decades. Treasury yields have been declining since April on these expectations.
However, a report on Tuesday showed U.S. employers had more job openings in May than anticipated, slightly more than in April. While positive for workers, Wall Street fears a robust job market could elevate inflation and delay rate cuts.
Following Powell’s comments, Treasury yields initially fell but later recovered somewhat after the job openings report. The 10-year Treasury yield stood at 4.45%, down from 4.46% on Monday.
Political factors have also influenced Treasury yields. Last week’s debate between Biden and former President Donald Trump led traders to anticipate a potential Republican sweep in November, pushing yields higher due to the possibility of debt-increasing policies.
In commodities, U.S. crude oil prices remained steady after hitting their highest since April, with Brent crude rising 0.2%. Prices are up on expected strong summer demand and potential hurricane impacts on Gulf of Mexico production, with Hurricane Beryl nearing Jamaica and the Cayman Islands.
European markets fell after a report showed persistent inflation above the European Central Bank’s target. Germany’s DAX dropped 0.7%, and France’s CAC 40 decreased by 0.3%. French stocks had previously rallied following election results suggesting a far-right party might not secure a decisive majority, reducing the risk of increased government debt.
In Asia, Japan’s Nikkei 225 rose 1.1% as the yen neared a 38-year low, benefiting Japanese exporters.
Featured Image: Freepik @ wirestock
