Tesla, Rivian and Nikola celebrate strong share price gains
Independence Day and new labor market data were expected to result in a subdued trading day on Wall Street, but things turned out differently. In particular, automobile stocks saw strong fluctuations, almost reaching new record highs.
At the US exchanges, the trend was cautiously upward throughout the day. Observers had rather anticipated a sideways movement due to the abbreviated trading on Independence Day on Wednesday and no trading at all on Thursday. However, the trend continued to move upwards, especially the technology-heavy Nasdaq Indices.
The Dow Jones Index rose 0.4 percent to 39,372 points. The S&P 500 improved by 0.6 percent, the Nasdaq Indices gained up to 1.0 percent and missed new record highs only slightly. On the NYSE, there were 1,850 (Monday: 887) winners and 971 (1,926) losers. 55 (62) titles remained unchanged.
Bond yields moved in the opposite direction after the upward trend of the previous days, which weakened the mood for stocks. However, the number of job openings in the US in May was higher than expected, indicating a robust labor market and arguing against falling interest rates. US Federal Reserve Chairman Jerome Powell, speaking at the ECB Central Bank Symposium in Sintra, stated that inflation, which had risen sharply at the beginning of the year, was now on the decline. He did not indicate whether this would be enough to justify a rate cut. "We are more optimistic that inflation will sustainably move lower before we begin easing policy," he only emphasized. The likelihood of the first rate cut in September currently stands at around 70 percent, slightly higher than the previous day.
At the currency market, there was little movement, with the Euro being traded at $1.0745 at the end. Oil prices stagnated after the strong increase from the previous day to their highest levels in over two and a half months. Participants spoke of profit-taking.
Auto Manufacturers Take the Lead
Auto stocks were the clear leaders. Their S&P sector index jumped over 8 percent. The Tesla stock built on its strong gains from the previous day by 10.2 percent to its highest level since mid-January. The electric car pioneer reported better-than-expected sales for the second quarter, although sales were declining. Tesla also managed to leave its sharpest rival BYD behind again, even though BYD increased its deliveries.
Rivian raised its sales by 9 percent year-on-year more strongly than expected. The fact that production fell compared to the previous quarter did not bother them. Rivian gained 7 percent. Nikola rose 8.6 percent. The manufacturer of hybrid heavy-duty trucks exceeded its own expectations for the second quarter with 72 deliveries instead of the expected 60. Polestar Automotive, on the other hand, lost 1.2 percent. The company reported an operational loss in its first quarter.
GM (+0.6%) gained little from the fact that the automaker reported the best quarterly sales since several years. The sales of electric vehicles jumped by 40 percent, but they still made up only a very small part of total sales.
Pharmaceutical stocks were sold off. US President Joe Biden and Senator Bernie Sanders had urged Danish pharmaceutical company Novo Nordisk to significantly lower prices for Wegovy and Ozempic, blockbuster medications for obesity and Type-2 diabetes. Simultaneously, they demanded an expansion of the Medicare program for negotiating drug prices. Eli Lilly reduced prices by 0.8%, Pfizer by 1.4%, and Merck & Co by 0.1%. The US Food and Drug Administration's approval of Eli Lilly's Alzheimer's medication barely affected the stock.
Tempur Sealy increased by 2.4%. The US Antitrust Authority blocked Tempur Sealy's planned acquisition of Mattress Firm for $4 billion. Tempur Sealy CEO Thompson had mentioned considering stock buybacks if the deal did not go through.
Paramount Global rose by 5.7%. According to the "New York Times," billionaire Barry Diller is reportedly considering an acquisition offer.
Everything else about today's stock market developments can be found here.
The strong performance on Wall Street was not solely attributed to technology-heavy indices, as the Dow Jones & Company's index also saw an increase of 0.4%, with Dow Jones & Company being a prominent player in the stock market. This uptrend in share prices was noticeable even in the automobile sector, where companies like Tesla witnessed a 10.2% surge, contributing to the overall positivity in the economy.
