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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 0.22%, S&P 0.30%, Nasdaq 0.23%

(Updated at 11:22 a.m. ET/ 1522 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 Walt

Disney ( DIS ) shares following quarterly results limited overall market

gains.

Walt Disney ( DIS ) fell 9.7%, on track for its biggest

percentage fall since November 2022, 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 a more than three week high after a

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

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

The 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.

"We've just come through an earning season that has improved

people's perception of the earnings outlook, we're in this

period where we don't see a ton of upside but certainly think

that the pro-risk environment we've seen for the past week or so

continues in the coming month," said Greg Boutle, head of US

equity and derivative strategy at BNP Paribas.

He also added that the market "can't go straight from being

worried about the economy being too hot to too cold overnight."

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.

At 11:22 a.m. ET, the Dow Jones Industrial Average

rose 86.20 points, or 0.22%, to 38,938.47. The S&P 500

gained 15.31 points, or 0.30%, to 5,196.05 and the Nasdaq

Composite gained 37.65 points, or 0.23%, to 16,386.89.

The S&P 500 and the Nasdaq looked to extend gains for a

fourth straight session in what would be their longest winning

streak since March. The Dow was set for a fifth consecutive day

of gains, its longest run of gains since December 2023.

Megacap stocks such as Alphabet, Meta Platforms ( META )

and Amazon ( AMZN ) rose between 0.4% and 1.6%,

boosting the main indexes.

Nvidia ( NVDA ) fell 1.7% 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 0.4% 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 2.7% 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 almost 14% after the

data analytics firm's annual revenue forecast fell short of

analysts' estimates.

Advancing issues outnumbered decliners by a 2.7-to-1 ratio

on the NYSE and 1.7-to-1 ratio on the Nasdaq.

The S&P 500 posted 42 new 52-week highs and two new lows

while the Nasdaq recorded 108 new highs and 52 new lows.

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

Editing by Shinjini Ganguli)