Nvidia Boosts S&P 500 and Nasdaq to Record Highs Amid Fed's Economic Signals

The S&P 500 and Nasdaq reached record highs, driven by gains in Nvidia and other megacap stocks after Federal Reserve Chair Jerome Powell suggested that further positive economic data could justify rate cuts. The markets remained optimistic about AI growth, despite uncertainties surrounding the Fed's rate decisions.

The S&P 500 and Nasdaq hit record highs on Tuesday, buoyed by Nvidia and other leading tech stocks, after U.S. Federal Reserve Chair Jerome Powell indicated that positive economic data could prompt rate cuts. Nvidia's 1.4% climb compensated for declines in other chip stocks, resulting in marginal gains for both indexes.

Meanwhile, Microsoft dipped 1.4%, leaving it with a market capitalization of $3.4 trillion. The Nasdaq is poised for its sixth consecutive record-high close, driven by AI growth optimism despite the Fed's uncertain rate-cut trajectory.

In his Congressional testimony, Powell acknowledged that although inflation remains above the 2% target, it has been improving. He emphasized that more favorable data would support the case for interest rate cuts yet refrained from signaling any specific timing. Market bets now predict a 72% chance of a 25 basis-point rate cut by the Fed's September meeting.

(With inputs from agencies.)