Benchmark indices on Wall Street had another mixed session on Thursday, July 2, but ended the truncated week on a positive note as a disappointing jobs report allayed some concerns about the US Federal Reserve raising interest rates in its upcoming policy on July 29.
The Dow Jones gained over 600 points to close at another record high, just shy of the mark of 53,000. The S&P 500 recovered from the day's low to end at the flat line, while the Nasdaq composite declined 0.8%. The Nasdaq 100 index, which includes multiple chipmakers, underperformed to end with losses of 1.6% on Thursday.
Despite Thursday's moves, the indices ended the holiday-shortened week on a positive note. The Dow gained 2%, while the S&P 500 and Nasdaq gained 1.8% and 2.1% respectively.
Why Did The Nasdaq Fall But Dow Rose?
The US jobs report sparked some relief on Wall Street that the Fed would at least stay put on rates for now if not cut them.
Non-farm payrolls for June stood at 57,000, well below estimates of 1,15,000. Unemployment rate though, improved to 4.2% from 4.3% earlier.
The two-year yield, which sees the closest reaction to any potential Fed move, declined after the jobs report. The US Dollar index also saw a sharp fall after the data was disclosed before market open.
Probability of the Fed staying put on rates on July 29 rose to 82% from 71% on July 1, according to the CME FedWatch tool.
The announcement sparked a rotation into old-economy names which are generally impacted due to higher inflation and interest rates.
On the flip side, many of the high-flying chip manufacturers like Intel, AMD and Micron, which fell between 7% to 11% on Wednesday, added another 4% to 6% to their losses on Thursday, as profit booking and rotation out of these stocks continued. Analysts believe that this is also partially a repricing of the entire sector taking place.
Intel, AMD and Micron shares gained anywhere between 160% to 250% during the April to June period.
Why Tesla Shares Fell Over 7% On Thursday?
Shares of Elon Musk's Tesla Inc. fell 7.5% on Thursday despite reporting better-than-anticipated vehicle deliveries for the June quarter.
The electric vehicle manufacturer delivered 4.8 lakh units in Q2, well above the estimates of 4.06 lakh.
However, the street believes that Tesla was a beneficiary during the quarter of the rising gas prices, which forced people to transition to EVs. However, with gas prices coming down, the advantage may ease, and that inflation, Trump policies, and rising chip costs, could outweigh the benefits seen in the quarter gone by.
Are US Markets Open On Friday?
No, US markets are not open on Friday, July 3 on account of the Independence Day Holiday. Trading will now resume only on Monday, July 6, after the long weekend.