Nasdaq Kicks Off Third Quarter On Upbeat Note As Tesla Extends Rally

The tech-heavy Nasdaq started the new quarter on a firm footing on Monday, as Tesla shares rose after the electric-vehicle maker reported record second-quarter vehicle deliveries.

Tesla (TSLA.O) gained 7.4% to hit a nine-month high, a day after its car deliveries topped market estimates on the back of incentives and steeper discounts.

“Tesla’s sales certainly caught some people by surprise in terms of their ability to continue to drive sales by price cuts,” said Art Hogan, chief market strategist at B Riley Wealth.

Shares of other vehicle makers including General Motors (GM.N) and Ford Motor (F.N) added over 1% each, while EV rival Rivian Automotive (RIVN.O) climbed 14.4% after it also beat Wall Street expectations for quarterly deliveries.

The consumer discretionary sector (.SPLRCD) that includes Tesla rose 1.5%, leading gains among the top 11 S&P 500 sectors, while healthcare stocks (.SPXHC) declined.

All three major U.S. indexes ended the first half of the year on a positive note on Friday, with the Nasdaq Composite (.IXIC) rallying 31.7% to its sharpest first-half rise in four decades, shrugging off concerns over a recession and a banking crisis.

Traders awaited the minutes of the Federal Reserve’s last policy meeting for cues on the central bank’s monetary tightening path. They are scheduled to be released on Wednesday.

Meanwhile, a closely watched gap between the yields on two- and 10-year Treasury notes hit its deepest inversion in over four-decades, signaling that financial markets see the current Fed tightening cycle eventually tipping the U.S. into a recession.

Megacap companies including Apple (AAPL.O), Microsoft (MSFT.O), and Alphabet (GOOGL.O) slipped between 0.1% and 0.5%, as worries over higher borrowing costs eating into their earnings soured investor sentiment.

At 10:15 a.m. ET, the Dow Jones Industrial Average (.DJI) was down 39.04 points, or 0.11%, at 34,368.56, the S&P 500 (.SPX) was up 0.32 points, or 0.01%, at 4,450.70, and the Nasdaq Composite (.IXIC) was up 30.79 points, or 0.22%, at 13,818.71.

U.S. manufacturing slumped further in June, according to a survey, reaching levels last seen when the economy was reeling from the initial wave of the COVID-19 pandemic in May 2020.

Trading volumes are expected to be thin with markets open for just half the day, ahead of the Independence Day holiday on Tuesday.

Investors also awaited surveys on U.S. services, job openings data as well as the June payrolls report later in the week.

U.S.-listed shares of Chinese carmakers Xpeng , Li Auto and Nio rose between 4.5% and 5.6% after the companies reported a surge in June vehicle deliveries compared with a year earlier.

Fidelity National Information Services (FIS.N) added 5.4% as buyout groups weighed bids for a majority stake in Worldpay, co-owned by the financial services firm, according to a Financial Times report.

Advancing issues outnumbered decliners by a 2.02-to-1 ratio on the NYSE and a 1.53-to-1 ratio on the Nasdaq.

The S&P index recorded 12 new 52-week highs and no new low, while the Nasdaq recorded 42 new highs and 33 new lows.

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