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Tesla falls on China-made EV sales drop in April

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

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Palantir ( PLTR ) slides on lower-than-expected annual rev.

forecast

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Indexes up: Dow 0.16%, S&P 0.17%, Nasdaq 0.13%

(Updated at 09:46 a.m. ET/ 1346 GMT)

By Sruthi Shankar and Shristi Achar A

May 7 (Reuters) - U.S. stock indexes rose on Tuesday,

extending their recent run on expectations that the Federal

Reserve will cut interest rates this year, while a drop in

shares of Walt Disney ( DIS ) following the company's quarterly results

limited their gains.

Walt Disney ( DIS ) fell 8.4% in early trading, 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, the three main U.S. stock indexes

were trading at their strongest level in more than three weeks

after a weaker-than-expected labor market report last week

fueled bets that the U.S. central bank will ease monetary policy

this year.

The report and better-than-expected earnings reports have

helped soothe jittery investors, who sent markets lower in

April, on concerns that sticky inflation and a robust economy

would prompt the Fed to keep rates higher for longer.

"The market is still pricing inflation will ultimately be

conquered, maybe not down to 2%, but certainly under 3%. The

central banks will win there and the cost will be a slower

economy," said Hal Reynolds, chief investment officer at Los

Angeles Capital Management.

"That will happen sometime later this year or early next

year and these rate cuts will come. But there is still a fair

bit of noise. I don't think things are much clearer today than

they were two months ago."

Traders currently anticipate 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 priced in for September and another in December.

Meanwhile, Minneapolis Fed President Neel Kashkari said

housing market strength and potentially stalled progress on

inflation targets mean monetary policy may not be as tight as

Fed officials think it is.

Ten of the 11 S&P 500 sectors rose, with consumer staples

leading advances, up 0.8%.

At 09:46 a.m. ET, the Dow Jones Industrial Average

rose 60.27 points, or 0.16%, to 38,912.54, the S&P 500

gained 8.89 points, or 0.17%, to 5,189.63 and the Nasdaq

Composite gained 20.85 points, or 0.13%, to 16,370.09.

The earnings season has been largely supportive for markets.

Of the nearly four-fifth of the S&P 500 companies that reported

first-quarter results through Friday, 76.8% topped analysts'

profit estimates, as per LSEG data. In a typical quarter, 67%

beat earnings estimates.

Nvidia ( NVDA ) fell 1.1% after the Wall Street Journal

reported that Apple was developing its own chip to run

artificial intelligence (AI) software in data centers.

Apple gained 1.5% ahead of an event later on Tuesday where

it is expected to unveil new iPads.

Tesla fell 2.3% 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 13% after the data

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

estimates.

Advancing issues outnumbered decliners by a 2.69-to-1 ratio

on the NYSE and a 1.54-to-1 ratio on the Nasdaq.

The S&P 500 posted 32 new 52-week highs and one new low

while the Nasdaq recorded 74 new highs and 35 new lows.

(Reporting by Sruthi Shankar and Shristi Achar A in Bengaluru;

Editing by Shinjini Ganguli)