Stocks Experience Modest Gains as Wall Street Begins Second Half of the Year
In a shortened session marking the start of a new trading month, quarter, and half, U.S. stocks edged slightly higher on Monday. The Dow Jones Industrial Average added 10.87 points, or 0.03%, closing at 34,418.47. The S&P 500 climbed 0.12% to finish at 4,455.59, while the Nasdaq Composite advanced 0.21% to 13,816.77. The positive performance came as the market welcomed the second half of what has already been a remarkable year on Wall Street.
As the markets closed early in anticipation of the Fourth of July holiday, they remained closed on Tuesday as well, providing a well-deserved break for traders and investors. However, amidst the shortened session, Tesla shares soared by 6.9% after the electric vehicle manufacturer reported delivery and production numbers that exceeded analysts’ expectations. This strong showing by Tesla also had a ripple effect on other electric vehicle stocks, with Rivian, Fisker, and Lucid all experiencing parallel gains.
The first half of the year delivered impressive gains, particularly for tech stocks buoyed by the growing enthusiasm around artificial intelligence. The Nasdaq Composite closed out the first half of 2023 with its largest gain since 1983, surging by 31.7%. Meanwhile, the S&P 500 recorded a 15.9% jump, marking its best first-half performance since 2019. However, the Dow Jones Industrial Average lagged behind, registering a modest 3.8% increase during the same period.
These substantial gains were supported by data indicating the resilience of the U.S. economy despite higher interest rates. The positive economic outlook helped boost investor sentiment, alleviating concerns on Wall Street about an impending downturn.
Sam Stovall, the chief investment strategist at CFRA Research, commented on the shifting investor mindset, stating, “Investors are saying, ‘you know what, maybe now is the time to alter my mindset from ‘Oh no’ to ‘FOMO.’” Stovall referred to the fear of missing out and suggested that investors might want to seize the opportunity of a potentially positive second half after the strong start of the year.
While the manufacturing purchasing managers’ index (PMI) for June, published by the Institute for Supply Management (ISM), came in slightly worse than expected, it still indicated a decline in economic activity. With the reading remaining below 50, investors will closely monitor data on the job market later in the week to gauge the overall health of the economy.
In conclusion, the stock market began the second half of the year with modest gains, building on the remarkable performance witnessed in the first half. Despite some concerns and slightly disappointing economic data, investor sentiment remains positive, driven by the growing interest in artificial intelligence and the resilience of the U.S. economy.