Investing.com — The S&P 500 closed at a record high for the fifth straight session on Tuesday after testimony from Fed Chairman Jerome Powell failed to deter investors from betting on a first rate cut in September.
At 4:00 PM ET (20:00 GMT), the price rose 0.1% to a new record high of 5,577.03. The added 0.2%, which extended the record run, fell 53 points, or 0.1%.
Powell says the cooling in the labor market points to the risk that interest rates will remain too high for too long
In a sign that the Federal Reserve continues to believe its policy actions are slowing the economy, the Fed said the economy was no longer “overheating” as labor tightness eased nearly to pre-pandemic levels.
The Fed chief also said that “good numbers” in the coming months would boost yield prospects, and pointed to the risk that rates could remain too high for too long. The comments reinforced investor expectations of a rate cut in September, just ahead of key inflation data later this week.
June inflation data, due Thursday, will provide more clues about the inflation path. The Fed has repeatedly indicated that it needs more confidence that inflation will decline before it can start cutting rates.
Stock traders estimate a more than 72% chance of a 25 basis point cut in September, up from 59% last week.
Profit season starts at banks
The focus this week will also be on the second quarter earnings season, which is expected to start at the end of the week with the results of several major banks.
JPMorgan Chase (NYSE:), Wells Fargo (NYSE:) and Citi Group (NYSE:) will announce its quarterly results on Friday.
PepsiCo (NASDAQ:) and Delta Air Lines (NYSE:) are also on tap this week.
On average, analysts see S&P 500 companies increasing their overall earnings per share by 10.1% in the second quarter, compared to an 8.2% increase in the first quarter, according to data from LSEG I/B/E/S .
Additionally, companies like Intel (NASDAQ:) and Nvidia (NASDAQ:) continued to post gains, both up more than 2%, amid growing confidence in all things artificial intelligence.
Nvidia and Tesla get thumbs up from Wall Street; Helen of Troy sinks
NVIDIA Corporation (NASDAQ:) rose more than 2% after Keybanc raised its price target on the chipmaker from $1,300 to $180, citing rising demand for AI.
Tesla Inc (NASDAQ:), meanwhile, rose more than 3% as Morgan Stanley reiterated its overweight rating on the stock amid positive signs of the EV maker’s foothold in the global electric vehicle market, which in May was 15%.
Helena of Troy Ltd (NASDAQ:) fell 27% to a 52-week low after the home goods company lowered its full-year guidance after reporting fiscal first-quarter earnings that fell short of expectations.
(Peter Nurse, Ambar Warrick contributed to this article.)
