Nasdaq, S&P 500 power on as Nvidia surge lifts tech stocks
Monday marked the 35th instance of the S&P 500 setting a fresh closing record this year, as sharp gains in AI-linked and other tech shares kept equity sentiment bright, offsetting the uncertainty around the Fed's rate-cut path. However, the Dow Jones underperformed, with a more than 1% fall in Salesforce and Microsoft being the biggest drags, while the rate-sensitive small-cap Russell 2000 dropped 0.4%.
The S&P 500 and the hovered at record highs on Tuesday, propelled by gains in Nvidia and other megacaps, as U.S. Federal Reserve Chair Jerome Powell testified before Congress that more "good" economic data would strengthen the case for rate cuts.AI-chip favorite Nvidia jumped 2.4%, while Applied Materials and Micron Technology gained 1.5% and 1.1%, respectively, briefly steering the Philadelphia SE Semiconductor index to a record high.
The S&P 500 Information Technology Index also hit an all-time high. Megacaps including Alphabet Meta Platforms and Tesla rose between 0.3% and 3.6%.
Monday marked the 35th instance of the S&P 500 setting a fresh closing record this year, as sharp gains in AI-linked and other tech shares kept equity sentiment bright, offsetting the uncertainty around the Fed's rate-cut path.
However, the underperformed, with a more than 1% fall in Salesforce and Microsoft being the biggest drags, while the rate-sensitive small-cap Russell 2000 dropped 0.4%.
In his testimony before Congress, Powell said that while inflation "remains above" the 2% soft-landing target, it has been improving in recent months and "more good data would strengthen" the case for interest-rate cuts.
However, the central bank chief insisted he was not "sending any signals about the timing of any future actions".
"It does sound like Powell is just looking for a few more months of decent inflation data in order to have the confidence to start cutting, so that could put a September rate cut in play," said Brian Jacobsen, chief economist at Annex Wealth Management.
Markets have stuck to pricing in 50 basis points of easing for the year, seeing a nearly 72% chance for a 25 bps cut by the Fed's September meeting, according to CME's FedWatch. Those bets were at under 50% a month ago.
Crucial inflation data is also due this week, including Thursday's consumer price index and the producer price index reading on Friday.
Investors also await the start of the second-quarter corporate earnings season this week, with big banks due to report on Friday.
Analysts, on average, see S&P 500 companies increasing their aggregate earnings per share by 10.1% in the second quarter, up from an 8.2% increase in the first quarter, according to LSEG I/B/E/S data.
At 12:05 a.m. ET, the Dow Jones Industrial Average was down 28.51 points, or 0.07%, at 39,316.28, the S&P 500 was up 10.96 points, or 0.20%, at 5,583.81, and the Nasdaq Composite was up 42.88 points, or 0.23%, at 18,446.62.
Major banks including Citigroup, JPMorgan Chase and Bank of America rose between 1.7% and 2.8% as Powell spoke. Reuters reported that the Fed was considering a rule change that could save big banks billions of dollars in capital.
Among single movers, Tempus AI reversed early gains after multiple brokerages including J.P.Morgan and Morgan Stanley initiated coverage of the stock with bullish ratings. The stock was last down 3%.
Declining issues outnumbered advancers for a 1.44-to-1 ratio on the NYSE, and by a 1.38-to-1 ratio on the Nasdaq.
The S&P index recorded 23 new 52-week highs and 13 new lows, while the Nasdaq recorded 46 new highs and 110 new lows.
Source: Stocks-Markets-Economic Times
