By Yasin Ebrahim

Investing.com – The S&P 500 cut losses Monday as a Tesla-led surge in consumer discretionary offset weakness in cyclical stocks including banks amid further cues from the bond market pointing to a potential recession.

These roses were 0.43%. The slipped by 0.06% (or 19 points), and the rose 1%.

The 8% increase in Tesla stock (NASDAQ:) caused by the announcement that Tesla would be splitting its stock and paying dividends to shareholders, drove consumer discretionary up.

The rally in Tesla comes just days ahead of the EV automaker’s update on first-quarter deliveries.

“We believe by the end of 2022 Tesla will now have the capacity/run rate for overall ~2 million units annually from roughly 1 million in 2021 with Berlin and Austin green-lighted to start production,” Wedbush said in a note.

Stocks of cruise lines were also performing well, with Carnival (NYSE 🙂 and Norwegian cruises up significantly even though pandemic locksdowns came back to focus following the Shanghai’s most severe lockdown in over two years after a rise in cases.

The bond market was quick to price in the potential impact on global growth at a time when investors fear the Federal Reserve’s hawkish path to curb inflation threatens to tip the economy into recession. For the first time in six years, the five-year Treasury yield briefly surpassed the 30 year yield.

Because a flattening yield reduces net interest margin, bank stock prices were significantly lower. Synchrony Financial (NYSE:), SVB Financial (NASDAQ:), and M&T Bank Corp (NYSE:) were down more than 3%.

As fears about China’s economic lockdown threatening demand and the new Ukraine-Russia Peace talks cooling concerns over supply disruptions weighed down oil prices, energy was the largest drag to the wider market.

“Growing concerns that China’s strict zero-Covid policy will lead to repeated lockdowns in key business centres […] is unlikely to lead oil demand in China unscathed,” Commerzbank said in a note.

Big tech traded mostly higher shrugging off pressure from falling chip stocks after Goldman Sachs soured sentiment on the sector, downgrading trio of stocks including, Microchip Technology (NASDAQ:), Teradyne (NASDAQ:), Qorvo (NASDAQ:) amid concerns about “challenging” macro backdrop.  

Meme stocks to add to recent gains, with AMC Entertainment (NYSE:) rising more than 39% after the move theater chain touted more “transformational” deals are in the pipeline. Gamestop (NYSE 🙂 gained more than 17%.

In other news, Coinbase (NASDAQ:) gained more than 8% as rumors swirled the company was eyeing a deal to acquire 2TM, the parent company of Latin America’s biggest crypto brokerage Mercado .