Stocks rose Tuesday as Federal Reserve Chair Jerome Powell noted progress on inflation, but reiterated that the central bank was not quite ready to cut rates.
The S&P 500 gained 0.62%, ending at 5,509.01 and marking its first close above the 5,500 threshold. The Nasdaq Composite jumped 0.84% to settle at 18,028.76. Both indexes closed at record highs, buoyed by a 10% jump in Tesla. The Dow Jones Industrial Average added 162.33 points, or 0.41%, closing at 39,331.85.
"We've made quite a bit of progress in bringing inflation back down to our target," Powell said at a central banking forum. "We want to be more confident that inflation is moving sustainably down toward 2% before we start the process of … loosening policy."
Treasury yields eased a bit following Powell's comments, and the major averages rose from their lows of the session.
Tesla shares lifted the S&P 500 as Elon Musk's electric vehicle company reported better-than-expected deliveries for the second quarter.
Nvidia shares fell 1.3%, weighing on the S&P 500, as investors questioned whether the artificial intelligence darling could continue its big year. The shares are up roughly 147% in 2024. Drugmaker Eli Lilly, another winner from the first half of the year, saw shares drop about 0.8%.
"The dicey pattern in Nvidia's recent trading is concerning in the sense that it has added volatility, but it has also allowed investors who missed the initial upwards trend to come in," said Quincy Krosby, chief global strategist for LPL Financial. "If the choppiness in the chipmaker and other big tech names continue, however, it could indicate that the market is recalibrating towards a rotation."
Krosby added that although her firm expects to see pockets of volatility in the market, she does think July can end with a gain — particularly if the economy continues to cool at a stable pace.
Wall Street is coming off a positive session to start the second half of the year. The tech-heavy Nasdaq Composite added 0.8% to close at a record, while the S&P 500 rose 0.3%. The Dow eked out a small gain. The S&P 500 climbed 14.5% in the first half of the year.
Trading volume is likely to be muted this week. The New York Stock Exchange closes early at 1 p.m. ET on Wednesday and will be shut on Thursday for Independence Day.