The S&P 500 Gains Momentum as Tesla and Tech Stocks Drive Market Higher
Major U.S. equities indexes traded higher in the opening session of the second half of 2024, with the technology sector leading the way to launch the holiday-shortened trading week. After enjoying a day off, fireworks, and other festivities on Wednesday, investors will likely turn their attention to the labor market data set for release on Friday.
Market Performance
The S&P 500 gained 0.3% on Monday. The Nasdaq received a boost from outperforming tech stocks, jumping 0.8%, while the Dow edged 0.1% higher.
Tesla (TSLA) shares popped 6.1%, the top performance of any S&P 500 component on the first trading day of the third quarter. The strong day for Tesla came after fellow electric vehicle (EV) manufacturer Nio (NIO) announced an all-time high for vehicle deliveries in June. The American Depository Receipts (ADRs) of China-based Nio were up 6.7% on Monday. Tesla is set to report its own delivery figures on Tuesday.
Merck (MRK) shares jumped 3.3% after the pharmaceutical giant announced that it will attain exclusive rights for the development and commercialization of opevesostat, a compound being investigated for the treatment of certain types of prostate cancer.
Shares of Apple (AAPL) gained 2.9% amid reports that the tech giant could raise prices for its high-end iPhones as a way of maintaining more attractive prices on lower-end models. According to Needham analysts, the strategy could help Apple broaden its user base without jeopardizing its relationship with high-end customers, who tend to be less price sensitive. The possible price adjustments come amid reports that Apple has seen declines in its share of the U.S. and China smartphone markets.
Impact of Hurricane Beryl
Shares of cruise operators sank amid concerns that Hurricane Beryl, which has strengthened into a Category 4 storm, could disrupt voyages in the Caribbean. Norwegian Cruise Line Holdings (NCLH) shares plunged 5.9%, suffering the heaviest losses in the S&P 500. Carnival Corp. (CCL) shares were not far behind, losing 5.4%. Warm ocean temperatures have led meteorologists to forecast an active hurricane season this year.
Elsewhere in leisure stocks, casino shares slipped. The declines in the gambling industry came after gross gaming revenue from Asian gaming hotspot Macau came in below consensus estimates in June to touch its lowest levels in 2024. Shares of Caesars Entertainment (CZR) were down 5%, while MGM Resorts (MGM) shares lost 3.6%.
Shares of Warner Bros. Discovery (WBD) fell 4.6% following reports that the entertainment giant could consider a merger between its popular Max service and the Paramount+ streaming platform owned by Paramount Global (PARA). Paramount Global fell 2.4%.
Conclusion
The market performance on the first trading day of the third quarter showcased a positive start with gains in tech stocks like Tesla and Apple driving the momentum. However, concerns about Hurricane Beryl impacting cruise operators and declining revenue in the gambling industry have highlighted potential challenges for certain sectors in the coming days.
Investors will be closely watching upcoming economic data releases and corporate earnings reports to gauge the overall health of the market as we progress through the third quarter of 2024.
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