4:05pm: Tesla reaches seven-month high
US markets were in the green at the close, with the Nasdaq gaining over 1%.
Much of those gains were driven by Tesla, which reached a new seven-month high of $234.86 after the EV manufacturer said all new Model 3 cars in the US now qualify for the full $7,500 EV tax credit, bringing the starting price down to $32,740 (with incentives).
The markets responded: the Dow closed 0.5% higher at 33,834, the S&P 500 was up 0.6% at 4,294 and the Nasdaq finished with a 1% gain at 13,239 points.
After Wednesday’s big AI-driven sell-off, the Nasdaq 100 bounced back to test a "major resistance zone," according to StoneX's Fawad Razaqzada.
"(The) tech-heavy index has now risen back to the base of Wednesday’s breakdown around 14500. Could it find some resistance here, or will the index power through this area, and once again thwart bears’ attempts to push the index lower?" Razaqzada wrote.
"The trend is bullish and so far, we haven’t had any key reversal signs to tell us otherwise. Still, a degree of caution should be warranted given that we are heading into a massive week."
12:05pm: Jobless claims hit highest level since October 2021
US stocks were higher in noon trading after new weekly data showed initial jobless claims reached their highest level since October 2021.
At midday, the Dow rose 60 points to 33,725, while the S&P 500 added 15 points at 4,282 and the tech-heavy Nasdaq gained 118 points to 13,223.
“For all the folks who are very concerned about the narrowness of the rally, there is a little bit of a rotation going on into some of the more beat-down value and cyclical stocks. ... So overall, pretty healthy activity,” Baird investment strategy analyst Ross Mayfield said.
Notable movers included shares of Carvana Co, which soared 38% after the online auto retailer boosted its financial outlook for the year.
9:59am: Traders keeping their powder dry
Shortly after the opening bell, the Dow was up 19 points to 33,684, the Nasdaq Composite added 19 points, 0.1%, to 13,124 and the S&P 500 improved lost 2 points to 4,266.
The benchmarks have stalled after a rally earlier this week. Investors, meanwhile, are already looking ahead.
“We’re in a bit of a news vacuum: Earnings are done, the debt ceiling is resolved, and we’re waiting for the Fed next week,” said Barbara Doran, CEO of BD8 Capital Partners on “Closing Bell: Overtime” on Wednesday. “It’s widely expected they will pause, but it’s really going to be important what their guidance is and what the [consumer price index] number on Tuesday will be and the [producer price index].”
Meanwhile, weekly jobless claims data released Thursday hit their highest level since October 2021. That rise also increased expectations the Federal Reserve would pause interest rate hikes at its meeting next week.
7:50am: GameStop slumps premarket on CEO firing
US stocks are expected to start mixed on Thursday as investors eye next week's Federal Reserve policy meeting as the next market catalyst, particularly after yesterday's surprise 25 basis point rate hike by the Bank of Canada.
In pre-market trading, futures tied to the Dow Jones Industrial Average (DJIA) fell 0.1%, but those for the S&P 500 and the Nasdaq 100 were both essentially flat, down 0.05%.
On Wednesday, the DJIA ended 91.74 points, or 0.3% higher at 33,665.02, but the S&P 500 closed 0.4% lower, while the Nasdaq Composite dropped 1.3%.
In after-hours corporate action, GameStop shares dropped nearly 20% after the video games retailer fired its CEO Matthew Furlong and appointed Ryan Cohen as its executive chairman.
Overall investors seem to be in a holding pattern while awaiting the June 13 and 14 FOMC meeting amid uncertainty over whether the Fed may hike interest rates again. Economic signs suggest that inflation is inching down, even as it remains well above the central bank’s 2% target.
TickMill Group’s market analyst Patrick Munnelly commented: "Following the unexpected move by the Reserve Bank of Australia earlier this week, the Bank of Canada surprised the markets with a 25bps rate hike, this development prompted investors to revise their expectations for the US Federal Reserve's upcoming policy decisions and become concerned about the overall policy outlook.
"The general consensus suggests that the Federal Reserve will implement at least one more rate hike, however, the key question remains whether this will occur next week or in July. According to the CME FedWatch tool, the probability of a 25bps hike by the Fed next week stands at 36%, compared to 22% from the previous day."
US economic data due on Thursday morning include the latest weekly jobless claims and wholesale inventories.