Stocks are drifting at the start of a shortened trading day Monday as momentum slows on Wall Street following a powerful rally.
The S&P 500 was 0.1% lower in early trading, though it’s still close to its highest level since April 2022. The Dow Jones Industrial Average was down 89 points, or 0.3% at 34,317, as of 9:40 a.m. Eastern time, while the Nasdaq composite was 0.2% higher.
Tesla was one of the stronger stocks in the market, rising 6.9%. The company said over the weekend that the number of vehicles it delivered during the spring surged by 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 profits when Tesla reports its earnings on July 19.
Tesla’s strong numbers helped drive stocks up of other electric-vehicle companies. Rivian jumped 13.4%, and Nikola gained 6.7%.
Much of the rest of the market was quieter following a rally where 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. That’s better than Wall Street’s main measure of health has done in 16 of the last 23 full years.
Trading in the U.S. stock market will end at 1 p.m. Eastern time and remain closed Tuesday in observance of Independence Day.
The market’s gains so far 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 later on Monday morning is expected to show another month of contraction for the industry.
But traders nevertheless 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 on July 26.
But the hope 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 big piece of data that could change the Fed’s thinking before its next meeting are likely the latest updates on monthly inflation.
In the bond market, the yield on the 10-year Treasury fell to 3.80% 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, rose to 4.91% from 4.90%.
In markets abroad, stocks were modestly lower in Europe. In Asia, Japan’s Nikkei 225 rose 1.7% to add to its huge run to start the year. The quarterly “tankan report” of business sentiment compiled by the Bank of Japan showed an improvement for the fifth consecutive quarter, from June last year.
Stocks were higher across much of the rest of Asia, with Hong Kong up 2.1% and South Korea up 1.5%
