Nasdaq 100, Dow Jones, S&P 500 News: Powell, NVIDIA Fuel Rally as Market Hits Record Highs

Powell’s Remarks Push S&P 500 to New High

The S&P 500 reached a new record on Tuesday, as investors analyzed Federal Reserve Chair Jerome Powell’s testimony. The Nasdaq Composite also hit a record,  while the Dow Jones Industrial Average struggled to produce gains.

At 14:28 GMT, the Dow Jones Industrial Average is trading 39180.04, down 164.75 or -0.42%. The S&P 500 Index is at 5580.59, up 7.74 or +0.14% and the Nasdaq 100 Index is trading 18467.22, up 63.49 or +0.34%.

Fed Chair Hints at Potential Policy Shift

In his semiannual update on monetary policy, Powell suggested the Fed might consider a less restrictive stance. He stated, “Reducing policy restraint too late or too little could unduly weaken economic activity and employment.” Powell added that more positive data would boost confidence in inflation moving towards the 2% target.

Key Economic Data Ahead

Investors await crucial inflation data later this week, including the June consumer price index on Thursday and the producer price index on Friday. These reports will likely influence the Fed’s future policy decisions.

Top Performing Stocks

Nvidia shares gained 2% after KeyBanc raised its price target to $180, citing robust demand for the H100 chip. The VanEck Semiconductor ETF (SMH) rose 1%. Chemours added 3% following a UBS upgrade to buy, based on favorable demand for refrigerants. Intel continued its upward trend, rising 2.7%.

Market Challenges

BP’s U.S.-listed shares fell over 4% after warning of a potential $2 billion impairment and weak refining margins. Helen of Troy shares plummeted more than 25% following a significant earnings miss and lower-than-expected revenue guidance.

Market Forecast: Cautiously Bullish with Valuation Concerns

The market outlook remains cautiously bullish, driven primarily by AI-focused tech leaders. Deiya Pernas of Pernas Research noted, “Given the exuberance around AI, we expect this trend to continue in the near to intermediate term.”

However, investors should be wary of overvaluation risks. Adam Crisafulli of Vital Knowledge warned that the impact of Fed rate cuts might be overestimated. He cautioned, “A modest easing cycle, as the approaching one will likely be, won’t be enough to immediately halt the growth slowdown presently underway.”

Traders should monitor upcoming economic data closely and remain alert to potential market corrections due to stretched valuations in certain sectors.

Technical Analysis

The S&P 500 E-mini Futures chart shows a strong uptrend since December, with the price currently at 5,638.75. The 50-day SMA (5,409.39) and 200-day SMA (5,041.71) are both rising, indicating bullish momentum. Recent price action has broken above the 5,588 resistance level, indicating the presence of strong buyers.