Tech Stocks Drive Nasdaq and S&P 500 to Record Highs Amid Fed Speculations

The S&P 500 and Nasdaq achieved record-high closes, led by Nvidia gains following optimistic remarks from Federal Reserve Chair Jerome Powell on economic data strengthening the case for rate cuts. Market movements were mixed, with notable rises in Tesla and banking stocks ahead of second-quarter earnings reports.

The S&P 500 and Nasdaq achieved record-high closes on Tuesday, driven by Nvidia's 2.5% gain after Federal Reserve Chair Jerome Powell indicated that improving economic data could justify rate cuts. This optimism in AI growth countered the uncertainty surrounding the Fed's rate-cut schedule.

While Microsoft dipped 1.4%, Tesla surged 3.7%, contributing to the Nasdaq's sixth consecutive record-high close and the S&P 500's fifth. Powell's congressional testimony noted inflation still above 2% target but improving, though he refrained from signaling definite timing for any rate cuts.

Market sentiment reflects a 72% chance of a 25 basis point cut by September, as opposed to less than 50% a month ago. U.S. Bank Wealth Management's Bill Northey commented on the resilient U.S. economy, predicting moderate growth. Key inflation data and bank earnings later this week are closely watched.

(With inputs from agencies.)