By Ankika Biswas and Lisa Pauline Mattackal
(Reuters) -The Nasdaq and the S&P 500 edged up on Tuesday, boosted by gains in Tesla and megacap stocks, while the Dow was flat with investors assessing Federal Reserve Chairman Jerome Powell's comments on the need for more evidence before cutting rates.
Tesla leapt 8.6% to its highest since the start of January after the EV maker reported a smaller-than-expected 5% drop in vehicle deliveries in the second quarter, pushing the consumer discretionary sector to the top of the S&P 500 sector indexes.
Megacap stocks such as Apple climbed 1%, while Amazon.com and Alphabet also edged up, with U.S. Treasury yields slipping across the board.
Powell told a panel that recent economic data represented "significant progress," though noting the Fed needed to see more before changing policy. Meanwhile, Chicago Fed President Austan Goolsbee noted he sees some "warning signs" of economic weakness and that central bank's goal is to get inflation down without stressing the labor market.
"What the Fed really wants to see is a further click up in unemployment and then a slowdown with regards to new job creation," said Genter Capital Management CEO Dan Genter, who also added that the recent moderation in inflation could be a green light for the Fed to start considering rate cuts.
The job openings and labor turnover survey, or JOLTS, showed job openings increased in May after posting outsized declines in the prior two months, but layoffs picked up amid slowing economic activity.
The data is the first in this week's series of U.S. jobs reports, particularly Friday's closely watched release of June non-farm payrolls, which will be crucial in assessing whether the U.S. labor market remains resilient against the backdrop of decades-high interest rates.
As recent data signals a renewed moderation in inflation and some signs of economic weakness, market participants are holding on to their bets of around two interest rate cuts by this year-end, seeing a 69% chance of easing starting in September, as per LSEG's FedWatch data.
However, AI chip leader Nvidia dropped 2%, with the trend in other chip stocks largely mixed.
At 11:50 a.m. ET, the Dow Jones Industrial Average was up 20.47 points, or 0.05%, at 39,189.99, the S&P 500 was up 9.20 points, or 0.17%, at 5,484.29, and the Nasdaq Composite was up 59.95 points, or 0.34%, at 17,939.25.
Trading volumes are expected to be light throughout the week, with the equity market closing early on Wednesday and shut all day Thursday for U.S. Independence Day.
Among others, the U.S. listing of Novo Nordisk lost 2% after U.S. President Joe Biden and Senator Bernie Sanders called on the Danish drugmaker to cut prices of its Ozempic and Wegovy drugs. Rival Eli Lilly dropped 1.8%.
Paramount Global climbed 2.1% after billionaire Barry Diller's digital-media conglomerate IAC is exploring a bid to take control of the media giant.
Advancing issues outnumbered decliners by a 1.58-to-1 ratio on the NYSE and by a 1.02-to-1 ratio on the Nasdaq.
The S&P index recorded eight new 52-week highs and four new lows, while the Nasdaq recorded 28 new highs and 131 new lows.
(Reporting by Ankika Biswas and Lisa Mattackal in Bengaluru; Editing by Maju Samuel)
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