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* Tesla falls due to lower sales of Chinese-made electric vehicles in April
* Walt Disney falls due to weaker TV activity in the 2nd quarter
* Palantir slips on lower-than-expected annual revenue forecast
* The indices are up: Dow 0.22%, S&P 0.30%, Nasdaq 0.23%.
May 7 (Reuters) – U.S. stock indexes rose on Tuesday, extending their recent rise on expectations of a Federal Reserve interest rate cut this year, while Walt Disney shares fell in the wake of of its quarterly results limited the gains of the market as a whole.
Walt Disney fell 9.7%, on track for its biggest percentage decline since November 2022, as a surprise profit in its streaming entertainment division was overshadowed by a decline in its traditional television business and a weaker box office.
Despite Disney’s negative impact, all three major U.S. stock indexes were trading at more than three-week highs after a weaker-than-expected labor market report last week fueled bets that the bank American central would reduce its rates.
That data and the better-than-expected results helped ease investors’ fears about soaring inflation and a robust economy that have kept rates high.
“We’ve just had an earnings season that has improved the perception of the earnings outlook, we’re in a period where we’re not seeing a lot of upside, but we certainly think the pro-risk environment that we saw last week The latter will continue in the coming month,” said Greg Boutle, head of U.S. equity and derivatives strategy at BNP Paribas.
He also added that the market “can’t go straight from worrying about an economy that’s too hot to worrying about an economy that’s too cold overnight.”
Traders anticipate rate cuts of 46 basis points (bps) from the Fed by the end of 2024, based on the application of LSEG interest rate probabilities, with an initial pivot towards rate reduction in September and another in December. They only expected one drop before last week’s jobs report.
As of 11:22 a.m. ET, the Dow Jones Industrial Average rose 86.20 points, or 0.22%, to 38,938.47. The S&P 500 gained 15.31 points, or 0.30%, to 5,196.05 and the Nasdaq Composite gained 37.65 points, or 0.23%, to 16,386.89.
The S&P 500 and Nasdaq looked to extend their gains for a fourth straight session, which would be their longest streak of gains since March. The Dow Jones was preparing to record a fifth consecutive day of gains, its longest streak of gains since December 2023.
Large caps such as Alphabet, Meta Platforms and Amazon rose 0.4% to 1.6%, boosting major indexes.
Nvidia fell 1.7% after The Wall Street Journal reported that Apple was developing its own chip to run artificial intelligence (AI) software in data centers.
Apple gained 0.4% after introducing a new chip called the M4, but putting it in an iPad Pro model rather than a laptop.
Tesla fell 2.7% after the U.S. automaker sold 62,167 Chinese-made electric vehicles in April, down 18% from a year earlier.
Palantir Technologies fell nearly 14% after the data analytics company’s annual revenue forecast fell short of analyst estimates.
Rising stocks outnumbered falling stocks by a ratio of 2.7 to 1 on the NYSE and 1.7 to 1 on the Nasdaq.
The S&P 500 recorded 42 new 52-week highs and two new record lows, while the Nasdaq recorded 108 new highs and 52 new record lows. (Reporting by Sruthi Shankar and Shristi Achar A in Bengaluru; Editing by Shinjini Ganguli)
