July 9 (Reuters) – The S&P 500 and Nasdaq hit record closes on Tuesday, boosted by gains in Nvidia after U.S. Federal Reserve Chairman Jerome Powell told lawmakers that more “good” economic data would strengthen the case for tapering of norms.
It was the Nasdaq’s sixth consecutive record close and the S&P 500’s fifth, as optimism about AI growth across the US corporate landscape offset uncertainty about the Fed’s rate-cutting path.
However, the central bank chief insisted he was not “sending any signal as to the timing of any future action”.
Markets have been pricing in 50 basis points of easing for the year, seeing a nearly 72% chance of a 25 bps cut by the Fed’s September meeting, according to CME’s FedWatch. These bets were below 50% a month ago.
“The US economy, and currently the US labor market, have been surprisingly resilient through 2024 and our base case is that a recession is not the most likely outcome, but instead we should continue to expect moderate growth through the balance of this coming year,” said Bill Northey, senior director of investments at US Bank Wealth Management.
Inflation data is also expected this week, including Thursday’s consumer price index and Friday’s producer price index reading.
Analysts on average see S&P 500 companies increasing their total 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.
The S&P 500 rose 0.07% to end the session at 5,576.98 points.
The Nasdaq gained 0.14% to 18,429.29 points, while the Dow Jones Industrial Average fell 0.13% to 39,291.97 points.
Volume on US exchanges was relatively light, with 9.6 billion shares traded, compared with an average of 11.6 billion shares over the previous 20 sessions.
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Reporting by Noel Randewich in Oakland, California Additional reporting by Lisa Mattackal and Ankika Biswas in Bengaluru Editing by Pooja Desai and Matthew Lewis
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