Nasdaq, S&P 500 power on as Nvidia surge lifts tech stocks
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Bank stocks rise as Powell speaks
S&P 500 notches 35th record closing high this year
Indexes: Dow down 0.08%, S&P up 0.20%, Nasdaq up 0.23%
Updated at 12:05 p.m. ET/1605 GMT
By Lisa Pauline Mattackal and Ankika Biswas
July 9 (Reuters) - The S&P 500 and the Nasdaq 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 NVDA.O jumped 2.4%, while Applied Materials AMAT.O and Micron Technology MU.O gained 1.5% and 1.1%, respectively, briefly 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. Megacaps including Alphabet GOOGL.O Meta Platforms META.O and Tesla TSLA.O rose between 0.3% and 3.6%.
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 more than1% fall in Salesforce CRM.N and Microsoft MSFT.O being thebiggest drags, while the rate-sensitive small-cap Russell 2000 .RUT 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 theFed'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, withbig 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 .DJI was down 28.51 points, or 0.07%, at 39,316.28, the S&P 500 .SPX was up 10.96 points, or 0.20%, at 5,583.81, and the Nasdaq Composite .IXIC was up 42.88 points, or 0.23%, at 18,446.62.
Major banks including Citigroup C.N, JPMorgan Chase JPM.N and Bank of America BAC.N 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 TEM.O 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 down3%.
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.
Reporting by Lisa Mattackal and Ankika Biswas in Bengaluru; Editing by Pooja Desai
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