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Walt Disney ( DIS ) slumps on weaker TV business in Q2

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Tesla falls on China-made EV sales drop in April

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Palantir ( PLTR ) slides on lower-than-expected annual revenue

forecast

(Updates to the close)

By David French

May 7 (Reuters) -

The S&P 500 and Dow Jones Industrial Average both clung onto

gains to close higher on Tuesday, extending recent winning

streaks fueled by renewed expectations that the Federal Reserve

will cut interest rates this year.

The advances pushed the S&P 500 to a fourth straight

higher close, and its best winning run since March. For the Dow

, it is now on its longest positive run since December

2023, gaining for the fifth session in a row.

The benchmark performances came despite Walt Disney ( DIS )

slumping as a surprise profit in its streaming entertainment

division was eclipsed by a drop in its traditional TV business

and weaker box office.

Despite Disney's ( DIS ) drag, for much of the day the three main

U.S. stock indexes had traded at their highest intraday levels

in more than three weeks, extending gains after a

weaker-than-expected labor market report last week fueled bets

that the U.S. central bank will cut rates.

"I think the market is in this little holding pattern until

the big data comes next week," said Garrett Melson, portfolio

strategist at Natixis Investment Manager Solutions, referring to

the Producer Price Index (PPI) due on May 14, and the Consumer

Price Index (CPI) scheduled for May 15.

Generally, the Fed and policymakers have been consistent in

their message in recent weeks that rate cuts will come but the

central bank is going to be cautious in implementing them. That

message was repeated on Monday by Federal Reserve Bank of New

York President John Williams and Richmond Federal Reserve

President Thomas Barkin.

This meant, on a day lacking major data announcements,

markets shrugged off comments from Minneapolis Federal Reserve

President Neel Kashkari that the Fed may need to hold rates

steady for the remainder of the year due to stalled inflation

and housing market strength.

Overall, Friday's payrolls data and better-than-expected

earnings reports have helped soothe investor jitters around

sticky inflation and a robust economy that have kept the rates

elevated.

Traders are anticipating rate cuts of 46 basis points (bps)

from the Fed by the end of 2024, according to LSEG's interest

rate probabilities app, with the first pivot to rate cut seen in

September and another in December. They were expecting only one

cut before the labor report last week.

"The market is far more hypersensitive to the data than the

Fed is," said Natixis' Melson, adding that "the bar for the Fed

to abandon the easing bias is extremely high."

According to preliminary data, the S&P 500

gained 6.75 points, or 0.13%, to end at 5,187.49 points,

while the Nasdaq Composite lost 16.69 points, or 0.10%,

to 16,332.56. The Dow Jones Industrial Average rose 26.18

points, or 0.07%, to 38,878.45.

Megacap stocks Alphabet and Meta Platforms ( META )

rose, boosting the main indexes.

Nvidia ( NVDA ) fell after the Wall Street Journal reported

that Apple ( AAPL ) was developing its own chip to run

artificial intelligence (AI) software in data centers.

Apple ( AAPL ) gained as it introduced a new chip called the M4, but

put the new chip in an iPad Pro model rather than a laptop.

Tesla fell after data showed the U.S. automaker

sold 62,167 China-made electric vehicles in April, down 18% from

a year earlier.

Palantir Technologies ( PLTR ) tumbled after the data

analytics firm's annual revenue forecast fell short of analysts'

estimates.