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Nvidia ( NVDA ) gains; other heavyweights mixed

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Fed's Powell wants more "good" economic data

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Indexes: S&P 500 +0.07%, Nasdaq +0.14%, Dow -0.13%

By Noel Randewich, Lisa Pauline Mattackal

July 9 (Reuters) - The S&P 500 and Nasdaq notched

record-high closes on Tuesday, fueled by gains in Nvidia ( NVDA ) after

U.S. Federal Reserve Chair Jerome Powell told lawmakers that

more "good" economic data would strengthen the case for rate

cuts.

AI chipmaker Nvidia ( NVDA ) climbed 2.5%, offsetting

declines in other chip stocks.

Microsoft ( MSFT ) dipped 1.4%, while Tesla added

3.7%, bringing its gain in 2024 to 5%.

It was the Nasdaq's sixth straight record-high close and the

S&P 500's fifth straight as optimism about the growth of AI

across the U.S. corporate landscape offset uncertainty around

the Fed's rate-cut path.

In 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."

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.

"The U.S. economy, and currently the U.S. labor market, have

been surprisingly resilient through the course of 2024 and our

base case is that a recession is not the highest probability

outcome, but rather we should continue to expect moderate growth

through the balance of this year and into next," said Bill

Northey, senior investment director at U.S. Bank Wealth

Management.

Inflation data is also due this week, including Thursday's

consumer price index and the producer price index reading on

Friday.

Shares of JPMorgan ( JPM ) and Wells Fargo ( WFC ) climbed over

1% and Citi rose 2.8%. The three banks will release

quarterly results on Friday, marking the start of second-quarter

earnings season.

Reuters reported that the Fed was considering a rule change that

could save big banks billions of dollars in capital.

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.

The S&P 500 climbed 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 declined 0.13% to 39,291.97 points.

Even as the S&P 500 rose, declining stocks outnumbered

rising ones within the index by a 1.5-to-one ratio.

Tempus AI ( TEM ) rose almost 4% after JPMorgan ( JPM ), Morgan Stanley

and other brokerages initiated coverage of the stock with

bullish ratings. The genetics testing firm, which receives

"immaterial" revenue from its AI business, is down around 7%

from the $37 price set in its June IPO.

Volume on U.S. exchanges was relatively light, with 9.6

billion shares traded, compared with an average of 11.6 billion

shares over the previous 20 sessions.