U.S. stocks end a tad higher as Tesla rallies
Options floor brokers work on the floor of the NYSE American, formerly known as the American Stock Exchange (AMEX) at New York Stock Exchange (NYSE) in New York City, U.S., May 10, 2023. REUTERS/Brendan McDermid
By Sruthi Shankar, Shristi Achar A and David Carnevali
(Reuters) - The S&P 500 closed higher on Friday but off session highs, as a Tesla rally failed to galvanize the broader market on the eve of the Federal Reserve's policy meeting and inflation data next week.
Tesla Inc shares climbed 4.06%, clinching their longest winning streak since January 2021, after General Motors Co agreed to use the company's Supercharger network. GM shares rose 1.06%.
The benchmark S&P 500 built on Thursday's 20% rise from its Oct. 12 finishing low, heralding the start of a new bull market as defined by some market participants.
"It's maybe the most hated bull market in the history of bull markets," said Tim Holland, chief investment officer of investment platform Orion OCIO.
"Sentiment was terribly depressed going into year-end and still remains on the bearish side."
The S&P 500 gained 4.93 points, or 0.11%, at 4,298.86, taking this week's advance to 0.38% and extending its winning streak to four weeks, the longest since the July-August 2022 period. The Nasdaq Composite notched its seventh straight week of gains, adding 20.62 points, or 0.16%, to 13,259.14 on the day and 0.13% on the week. The Dow Jones Industrial Average rose 43.17 points, or 0.13%, to 33,876.78, for a weekly gain of 0.33%.
A megacap stocks rally, better-than-expected earnings season and expectations that the Fed was nearing the end of its rate-hiking cycle have supported Wall Street this year despite concerns about a looming recession and sticky inflation.
Shares in tech companies including Apple Inc, Advanced Micro Devices and Nvidia Corp rose between 0.22% and 3.20% after retreating earlier this week.
Traders see a 72% chance of the U.S. central bank holding interest rates at the current 5%-5.25% range in its June 13-14 policy meeting, according to CMEGroup's Fedwatch tool.
"The overall tone of the market is based on the idea that the Fed will pause its increases," said Rick Meckler, partner at Cherry Lane Investments. "As it pauses, the broader market will start to rally and maybe catch up with the large-cap tech stocks that have led the way up until now."
Consumer prices data on Tuesday will help shape expectations around further moves by the Fed, with traders already pricing in a 50% chance of another 25-basis-point rate hike in July.
The CBOE Volatility index, commonly known as Wall Street's fear gauge, sank to the lowest level since February 2020 before regaining some ground.
Target Corp slipped 3.26% after Citi downgraded the big-box retailer to "neutral," saying sales could fall further this year due to economic challenges.
Adobe Inc rose 3.41% after Wells Fargo upgraded it to "overweight," saying the Photoshop software maker was poised to benefit from the generative AI boom.
Netflix Inc gained 2.60% following a report that the streaming giant's subscriptions jumped after its crackdown on password sharing.
Declining issues outnumbered advancing ones on the NYSE by a 1.49-to-1 ratio; on Nasdaq, a 1.84-to-1 ratio favored decliners.
The S&P 500 posted 15 new 52-week highs and five new lows; the Nasdaq Composite recorded 84 new highs and 53 new lows.
(Reporting by Sruthi Shankar and Shristi Achar A in Bengaluru; Editing by Vinay Dwivedi and Richard Chang)
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