Automakers outside of Tesla were also strong, with General Motors up 5.7 per cent and Ford Motor up 4.6 per cent.
The overall US stock market has made a stunning recovery from its springtime sell-off of roughly 20 per cent. But challenges still lay ahead for Wall Street, with one of the largest being the continued threat of Trump’s tariffs.
Many of Trump’s stiff proposed taxes on imports are currently on pause, but they’re scheduled to kick into effect in about a week. Depending on how big they are, they could hurt the economy and worsen inflation.
Congress is also debating proposed cuts to tax rates and other measures that could send the US government’s debt spiralling higher, which could push inflation upward. That in turn could mean higher interest rates, which would hurt prices for bonds, stocks and other investments.
Despite such challenges, strategists at Barclays say they’re seeing signals of euphoria emerging among some investors. The strategists say a measure that tries to show how much “excess optimism” is in the market is not far from the peaks seen during the “meme stock” craze that sent GameStop to market-bending heights or to the dot-com bubble at the turn of the millennium.
Other signals are also indicating exuberance in the market, such as demand for what are known as “blank-check companies” that hunt for privately held companies to buy. When too much optimism is in the market, it can inflate stock prices to too-high levels in what’s called a “bubble.”
Of course, “market bubbles are infamously difficult to predict and can endure far longer than anticipated before correcting,” according to the Barclays strategists led by Stefano Pascale and Anshul Gupta.
In the bond market, Treasury yields rose following some mixed reports on the US economy.
Musk and Trump’s relationship continues to sour.Credit: AP
One said US employers were advertising more job openings at the end of May than the month before and than economists expected. That could be an encouraging signal for a job market that had been appearing to settle into a low-hire, low-fire state.
Separate reports on US manufacturing were more mixed. One from the Institute for Supply Management said US manufacturing activity shrank again in June, but not by as much as the month before.
“Customers do not want to make commitments in the wake of massive tariff uncertainty,” one survey respondent in the fabricated metal products industry said.
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A separate report from S&P Global suggested manufacturing production returned to growth in June after three months of declines.
The yield on the 10-year Treasury rose to 4.25 per cent from 4.24 per cent late Monday after erasing an earlier, modest loss from the morning.
The two-year Treasury yield, which more closely tracks expectations for what the Federal Reserve will do with its main interest rate, rose more sharply to 3.78 per cent from 3.72 per cent. Better-than-expected data on the economy could give the Fed more reason to stay on pause with interest rates, after it halted its cuts to rates at the start of this year.
Fed Chair Jerome Powell said again on Tuesday that he wants to wait for more evidence about how much Trump’s tariffs will affect the economy and inflation before resuming cuts to interest rates. That’s despite Trump’s angry insistence lately that Powell and the Fed act more quickly to give the economy a boost through lower rates.
In stock markets abroad, indexes were mixed in Europe and Asia.
Japan’s Nikkei 225 fell 1.2 per cent, and South Korea’s Kospi rose 0.6 per cent for two of the larger moves.
AP
