Tesla soars after Q2 delivery data
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Paramount Global gains on possible IAC bid
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Fed Chair Powell says risks becoming more balanced
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Job openings rise in May
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Lilly falls as Biden calls for lower obesity drug prices
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Indexes up: Dow 0.2%, S&P 0.4%, Nasdaq 0.7%
(Updates at 2:20 p.m. EDT/1820 GMT)
By Ankika Biswas, Lisa Pauline Mattackal and Saeed Azhar
July 2 (Reuters) - Wall Street's main stock indexes rose on Tuesday, boosted by gains in Tesla and megacap growth stocks, but volumes were thin ahead of the July Fourth holiday and the closely watched release of June nonfarm payrolls on Friday.
Tesla surged 8.8% to its highest level since the start of January after the EV maker reported a smaller-than-expected 5% drop in vehicle deliveries in the second quarter, pushing the consumer discretionary sector to the top of the S&P 500 sector indexes.
Megacap stocks such as Apple climbed 1.4%, while Amazon.com rose 1.4% and Alphabet also edged up, with U.S. Treasury yields slipping across the board.
U.S. Federal Reserve Chairman Jerome Powell told a panel that recent economic data represented "significant progress," though he noted that the Fed needed to see more before changing policy. Meanwhile, Chicago Fed President Austan Goolsbee said he sees some "warning signs" of economic weakness and that the central bank's goal is to get inflation down without stressing the labor market.
"What the Fed really wants to see is a further click up in unemployment and then a slowdown with regards to new 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 labor turnover survey, or JOLTS, showed job openings increased in May after posting outsized declines in the prior two months, but layoffs picked up amid slowing economic activity.
The data is the first in this week's series of U.S. jobs reports, particularly Friday's closely watched release of June nonfarm payrolls, which will be crucial in assessing whether the U.S. labor market remains resilient against the backdrop of decades-high interest rates.
As recent data signals a renewed moderation in inflation and some signs of economic weakness, market participants are holding on to their bets of around two interest rate cuts by this year-end, seeing a 69% chance of easing starting in September, as per LSEG's FedWatch data.
However, AI chip leader Nvidia dropped 1.4%, with the trend in other chip stocks largely mixed. Nvidia is up about 148% year-to-date.
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 an additional 10% before year end, which is kind of frightening because if we're at 5500 or so (on the S&P 500), 10% on that means we really have to see earnings justify that type of multiple," said John Lynch, chief investment officer of Comerica Wealth Management.
Barry Bannister, chief U.S. equity strategist at Stifel, in a note said he expects the S&P 500 could correct to 4,750 points by the end of third quarter as GDP will slow, but inflation will pick up moderately in second half of 2024.
At 2:20 p.m. EDT the Dow Jones Industrial Average rose 82.64 points, or 0.21%, to 39,252.16, the S&P 500 gained 20.75 points, or 0.38%, to 5,495.84 and the Nasdaq Composite gained 115.67 points, or 0.65%, to 17,994.97.
Trading volumes are expected to be light throughout the week, with the equity market closing early on Wednesday and shut all day Thursday for U.S. Independence Day.
Among others, the U.S. listing of Novo Nordisk lost 1.7% after U.S. President Joe Biden and Senator Bernie Sanders called on the Danish drugmaker to cut prices of its Ozempic and Wegovy drugs. Rival Eli Lilly dropped 0.7%.
Paramount Global climbed 3.8% after news that billionaire Barry Diller's digital-media conglomerate IAC was exploring a bid to take control of the media giant.
Advancing issues outnumbered decliners by a 1.63-to-1 ratio on the NYSE.
The S&P 500 posted 13 new 52-week highs and 4 new lows while the Nasdaq Composite recorded 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)