NASDAQ 100, Dow Jones, S&P 500: Second Half Starts on Positive Note Led by Tesla

Highlights

• Stocks rise, Nasdaq surges, and Tesla leads the rally.
• Impressive first-half gains, but economic concerns persist.
• Manufacturing slumps, market breadth remains positive.

Overview

Stocks kicked off the second half of the year with a slight rise on Wall Street in a shortened session. The Dow Jones Industrial Average closed at 34,418.47, adding 10.87 points (or 0.03%), while the S&P 500 ended at 4,455.59 with a climb of 0.12%. The Nasdaq Composite advanced by 0.21% to reach 13,816.77.

Tesla Leads Electric Vehicle Stocks Higher

Tesla shares were the standout performer, surging 6.9% on better-than-expected delivery and production numbers. This positive momentum extended to other electric vehicle stocks like Rivian, Fisker, and Lucid. Major banks also fared well, raising dividends and passing the Federal Reserve’s health check. Wells Fargo shares rose 1.7%, Citigroup climbed 1.5%, and the S&P 500 banks index increased by 1.5%.

Outstanding First-Half Performance

The first half of the year was remarkable for the markets. Particularly the Nasdaq Composite, which achieved its largest gain since 1983, soaring 31.7%. The S&P 500 also delivered its best first-half performance since 2019, rising by 15.9%.

However, the Dow Jones Industrial Average lagged behind with a modest climb of 3.8%. The impressive gains were fueled by growing enthusiasm around artificial intelligence. As well as the resilience of the U.S. economy, despite concerns about higher interest rates. This positive sentiment has prompted some investors to shift their mindset from fear of missing out (FOMO) to a more optimistic outlook for the second half of the year.

Manufacturing Report Disappoints

Although the market started on a positive note, economic data indicated a decline in economic activity, with the ISM’s manufacturing purchasing managers’ index for June falling slightly below expectations and remaining below the threshold of 50. Investors will closely monitor upcoming job market data for further insights. Trading volumes were lower than average as the stock market closed early ahead of the Independence Day holiday, leading many participants to stay on the sidelines and avoid making significant bets.

While most sectors of the S&P 500 experienced gains, healthcare and the technology sector faced slight declines of 0.8% and 0.3% respectively. Recent signs also suggest a broadening rally, indicating a stronger and more sustained upward move when the market exhibits broader strength.

Summary

Financial markets expressed concerns about the economy, highlighted by the U.S. Treasury yield curve experiencing its deepest inversion since 1981. Additionally, a survey revealed that U.S. manufacturing slumped further in June, reaching levels last seen during the initial wave of the COVID-19 pandemic. Despite these concerns, market breadth remained positive, with advancing issues outnumbering decliners on both the NYSE and Nasdaq exchanges. The S&P 500 recorded 20 new 52-week highs and no new lows, while the Nasdaq Composite witnessed 59 new highs and 47 new lows.