Tesla shares rise, boosted by new car plans
U.S. stocks were higher in early trading Monday as investors await comments from a series of policymakers later this week that could provide clarity on whether the Federal Reserve will cut interest rates next year.
As of 9:47 a.m. EST, the Dow Jones Industrial Average was up 21.60 points, or 0.08 percent, to 30,063.4; the Standard & Poor’s 500 Index was up 5.99 points, or 0.36 percent, to 3,814.4; and the Nasdaq Composite Index was up 52.21 points, or 0.53 percent, to 11,339.13.
Tesla shares jumped 1.1 percent after sources told Reuters that the electric carmaker plans to produce a car worth 25,000 euros ($26,838) at its factory near Berlin.
On Friday, U.S. stocks posted their best single-week performance in about a year, boosted by a plunge in U.S. Treasury yields as a weaker-than-expected monthly jobs report raised hopes that the Federal Reserve could start cutting interest rates next year.
According to GEM’s Fed Watch tool, traders have an 80% expectation that the Fed will keep rates steady in September, while the likelihood of the first easing coming as early as November is about 50%.
That expectation will be put to the test this week as market participants assess the views of a number of Fed policymakers, including Fed Chairman Jerome Powell, in the coming days.
Other speakers include voting members such as Fed Governor Lisa Cook, New York Fed President John Williams and Dallas Fed President Lorie Logan.
The yield on the benchmark 10-year U.S. Treasury note fell to a five-week low on Friday before rising slightly to 4.63 percent on Monday.
“One of the things that’s going to keep the rally momentum going is for the 10-year Treasury (yield) to stabilize,” said Jamie Cox, managing partner at Harris Financial Group.
“Rates will stabilize at lower levels because the Fed clearly has no intention of raising rates in 2024, and then we’re getting closer and closer to a dot plot of rate cuts in 2025.”
This week’s economic data calendar is lighter, with weekly initial jobless claims due Thursday and the University of Michigan’s consumer confidence report due Friday.
Big companies such as Walt Disney, Instacart and Biogen report earnings this week.
A total of 403 companies in the Standard & Poor’s 500 index reported third-quarter profits, with 81.6 percent beating analysts’ expectations, according to the London Stock Exchange.