The S&P 500 closed above 5,500 for the first time 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. Canada’s main stock index also ended higher on its first trading day of the quarter.
The U.S. 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. job reports, particularly Friday’s 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. The Canadian June jobs report will also be released on Friday and will be an important data point in determining whether another Bank of Canada rate cut will arrive this summer.
U.S. Federal Reserve Chairman Jerome Powell told a panel Tuesday that recent economic data represented “significant progress,” though he noted that the Fed needed to see more before changing policy.
“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 U.S. inflation could be a green light for the Fed to start considering rate cuts.
The Dow Jones Industrial Average rose 162.33 points, or 0.41%, to close at 39,331.85, the S&P 500 gained 33.92 points, or 0.62%, to 5,509.01 and the Nasdaq Composite gained 149.46 points, or 0.84%, to 18,028.76.
Tesla surged 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.
Megacap stocks such as Apple rose 1.6%, while Amazon.com and Alphabet also climbed.
AI chip leader Nvidia dropped 1.3%, with the trend in other chip stocks largely mixed. Nvidia is up more than 147% year-to-date.
The Toronto Stock Exchange’s S&P/TSX composite index ended up 78.01, or 0.4%, at 21,953.80, its highest closing level since June 12.
The TSX was closed on Monday for Canada Day, which followed a decline of 1.8% in June even as the S&P 500 notched gains.
The TSX energy sector Tuesday rose 1.5% as the price of oil touched its highest level in more than two months.
Technology was also a standout, rising 1.1%, consumer staples was up 1.2% and heavily weighted financials added 0.6%.
Shares of Onex Corp, which counts WestJet Airlines among its portfolio of investments, were up 4.6% after a strike that led to flight cancellations at WestJet ended.
First Quantum Minerals Ltd shares climbed 3.1% after news that Panama would conduct an environmental audit of the Cobre Panama mine to decide whether it can safely be reopened.
Domestic data showed deterioration in manufacturing activity, extending a record-setting run of contraction for the sector. The S&P Global Canada Manufacturing Purchasing Managers’ Index was unchanged in June, matching the seasonally adjusted 49.3 level that was posted in May.
Canadian government bond yields rose across the curve, catching up with the move in U.S. Treasuries on Monday. The 10-year was up 12 basis points at 3.627%, after earlier touching its highest level since May 31 at 3.659%. U.S. Treasury yields were modestly lower on Tuesday.
On Wall Street, the U.S. listing of Novo Nordisk fell almost 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 also dropped.
Paramount Global climbed 5.7% after news that billionaire Barry Diller’s digital-media conglomerate IAC was exploring a bid to take control of the media giant.
Volume on U.S. exchanges was 9.89 billion shares, compared with the 11.8 billion average for the full session over the last 20 trading days. 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.
Advancing issues outnumbered decliners by a 2.06-to-1 ratio on the NYSE. There were 179 new highs and 97 new lows on the NYSE. The S&P 500 posted 15 new 52-week highs and 4 new lows, while the Nasdaq Composite recorded 39 new highs and 196 new lows.
Reuters, Globe staff