US Stocks Mixed as Wall Street Momentum Slows and Tesla Shares Decline
A day of mixed trading resulted in a split performance for the U.S. stock market as recent momentum slowed.
NEW YORK (AP) —
A day of mixed trading resulted in a split performance for the U.S. stock market on Tuesday, following record highs in the previous two days.
The S&P 500 declined by 0.1%, marking its first loss in four days. The Dow Jones Industrial Average increased by 400 points, or 0.9%, while the Nasdaq composite fell by 0.8%.
Tesla and Market Influences
Tesla shares decreased by 5.3%, becoming one of the largest drags on the S&P 500. The decline followed recent tensions between Tesla CEO Elon Musk and President Donald Trump, who suggested that government spending related to Musk’s companies could be reviewed. Tesla has lost approximately 25.5% of its value this year.
Several companies associated with artificial intelligence also saw declines. Nvidia’s shares fell by 3%, representing the largest negative impact on the S&P 500 for the day.
Casino and Automaker Performance
More stocks within the S&P 500 rose than fell, led by gains in casino companies. These increases followed a report indicating better-than-expected growth in gaming revenue in Macao, China. Las Vegas Sands rose by 8.9%, Wynn Resorts increased by 8.8%, and MGM Resorts International gained 7.3%.
Automakers excluding Tesla also performed strongly. General Motors rose by 5.7%, and Ford Motor increased by 4.6%.
Market Summary
- S&P 500: decreased by 6.94 points to 6,198.01
- Dow Jones Industrial Average: increased by 400.17 points to 44,494.94
- Nasdaq composite: decreased by 166.84 points to 20,202.89
The U.S. stock market has recovered from a springtime decline of approximately 20%. However, potential challenges remain, including the possible implementation of tariffs proposed by President Trump.
Economic and Policy Factors
Many proposed tariffs are currently paused and are scheduled to take effect in about a week. The scale of these tariffs could affect the economy and inflation. Additionally, ongoing discussions in Washington about tax rate reductions and other fiscal measures could increase government debt and potentially raise inflation, which may lead to higher interest rates and impact prices for various investments.
Barclays strategists have noted signs of increased optimism among some investors. A measure of market optimism is approaching levels seen during previous periods of heightened market activity, such as the “meme stock” period and the dot-com bubble. Other indicators include increased demand for blank-check companies, which are used to acquire privately held firms. Elevated optimism can contribute to inflated stock prices, sometimes resulting in market bubbles.
"Market bubbles are infamously difficult to predict and can endure far longer than anticipated before correcting," according to Barclays strategists Stefano Pascale and Anshul Gupta.
Bond Market and Economic Data
Treasury yields fluctuated following mixed economic reports. One report indicated that U.S. employers had more job openings at the end of May compared to the previous month and to economists’ expectations, suggesting potential strength in the job market.
Reports on U.S. manufacturing were mixed. The Institute for Supply Management reported that manufacturing activity contracted again in June, though at a slower rate than the previous month.
"Customers do not want to make commitments in the wake of massive tariff uncertainty," said a survey respondent in the fabricated metal products industry.
A separate report from S&P Global indicated that manufacturing production grew in June after three months of declines.
The yield on the 10-year Treasury remained at 4.24%, unchanged from late Monday, after fluctuating earlier in the day. The two-year Treasury yield, which is closely linked to expectations for Federal Reserve interest rate decisions, rose to 3.77% from 3.72%. Positive economic data could lead the Federal Reserve to maintain its current interest rate policy after halting rate cuts earlier this year.
Federal Reserve Chair Jerome Powell stated on Tuesday that he intends to wait for more information on the effects of tariffs before considering further interest rate reductions. President Trump has recently called for the Federal Reserve to act more quickly to lower rates.
International Markets
Stock indexes in Europe and Asia showed mixed results. Japan’s Nikkei 225 declined by 1.2%, while South Korea’s Kospi increased by 0.6%.