Chip stocks, megacaps steer S&P 500, Nasdaq to record highs
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S&P 500 notches 35th record closing high this year
Lilly up after data shows Mounjaro more efficient than Wegovy
Indexes: Dow down 0.38%, S&P up 0.21%, Nasdaq up 0.47%
Updated at 10:05 a.m. ET
By Lisa Pauline Mattackal and Ankika Biswas
July 9 (Reuters) - The S&P 500 and the Nasdaq hit record highs on Tuesday, powered by semiconductors andmegacaps, as Congress heard testimony from Federal Reserve Chair Jerome Powell, who said more "good" economic data would strengthen the case for interest-rate cuts.
AI-chip favorite Nvidia NVDA.O jumped 4%, while Applied Materials AMAT.O and Micron Technology MU.O gained 2% and 3%, respectively, steering the Philadelphia SE Semiconductor index .SOX to a record high.
The S&P 500 Information Technology Index .SPLRCT also hit an all-time high, along with megacaps including Alphabet GOOGL.O and Apple AAPL.O, while Meta Platforms META.O and Amazon.com AMZN.O rose0.9% and 0.3%, respectively.
Monday markedthe 35th instance of the S&P 500setting 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'srate-cut path.
However, the Dow Jones .DJI underperformed, with a 2% fall in Salesforce CRM.N being the biggest drag on the blue-chip index.
Meanwhile, in his Congressional testimony, 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 rate cuts.
"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.
The last set of economicprojections from the central bank's policymakers showed anexpectation of just one rate cut this year. But markets have stuck to pricing in 50 basis points of easing, seeing a nearly 72% chance for a 25 bps cut at the Fed's September meeting, according to CME's FedWatch.
Those bets were at under50% a month ago.
Crucial inflation data is also due this week, including Thursday'sconsumer price index and the producerprice index reading on Friday.
Investors also awaitthe 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 10:05 a.m. ET, the Dow Jones Industrial Average .DJI was down 147.89 points, or 0.38%, at 39,196.90, the S&P 500 .SPX was up 11.96 points, or 0.21%, at 5,584.81, and the Nasdaq Composite .IXIC was up 86.31 points, or 0.47%, at 18,490.05.
Among single movers, Tempus AI TEM.O jumped7.5% after multiple brokerages including J.P.Morgan and Morgan Stanley initiated coverage of the stock with bullish ratings.
Eli Lilly <LLY.N> edgedup 0.6% aftera data analysis report showed its treatment Mounjaro leads to faster and greater weight loss than Novo Nordisk's obesity drug, Wegovy.
CVS Health CVS.N and UnitedHealth Group UNH.N fell0.9% and 0.4%, respectively, after the U.S. Federal Trade Commission said a handful of pharmacy benefit managersexercized an outsized influence over prescription drug prices.
Declining issues outnumbered advancers for a 1.51-to-1 ratio on the NYSE, andfor a 1.31-to-1 ratio on the Nasdaq.
The S&P index recorded 19 new 52-week highs and ninenew lows, while the Nasdaq recorded 38 new highs and 74 new lows.
Reporting by Lisa Mattackal and Ankika Biswas in Bengaluru; Editing by Pooja Desai
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