Record-High Closes: Investors Focus on Upcoming Data and Fed Commentary

On Monday, the S&P 500 and Nasdaq reached record-high closes as investors looked forward to new inflation data, insights from Federal Reserve Chair Jerome Powell, and the arrival of the quarterly earnings season. Significant stock movements included Nvidia, Intel, and Advanced Micro Devices, boosting the semiconductor index.

The S&P 500 and Nasdaq reached record-high closes on Monday as investors anticipated new inflation data, comments from Federal Reserve Chair Jerome Powell, and the start of the quarterly earnings season. Nvidia gained almost 2%, Intel surged over 6%, and Advanced Micro Devices climbed 4%, positively impacting the Philadelphia semiconductor index by 1.9%.

Traders are set to scrutinize consumer price data due on Thursday and producer price data expected on Friday to assess the Fed's battle against inflation. Concern lingers among investors that delayed interest rate cuts could harm the labor market and drive the economy into recession. They will keenly observe Powell's upcoming semiannual testimony before U.S. Senate and House committees on Tuesday and Wednesday.

'What investors want to hear is a dovish tone and an acknowledgment that the two-sided risks are more evenly balanced today, particularly with respect to the labor market,' stated Ross Mayfield, an investment strategy analyst at Baird. Expectations for interest rate cuts as early as September rose following the recent nonfarm payrolls report, which showed a slowdown in U.S. job growth.

Presently, traders see a greater than 75% chance of a rate cut of at least 25 basis points by September, up from last week's 60%, according to CME's FedWatch. Citigroup, JPMorgan Chase, and Wells Fargo are set to begin the Wall Street second-quarter earnings season on Friday. Citigroup shares climbed 1.1%, while Wells Fargo decreased by 1%.

Analysts anticipate a 10.1% increase in aggregate earnings per share for S&P 500 companies in the second quarter, compared to an 8.2% increase in the first quarter, according to LSEG I/B/E/S. The S&P 500 rose 0.10% to finish the session at 5,572.85 points.

The Nasdaq climbed 0.28% to 18,403.74 points, and the Dow Jones Industrial Average dropped 0.08% to 39,344.79 points. This marked the Nasdaq's fifth consecutive record-high close and the S&P 500's fourth.

Of the 11 S&P 500 sector indexes, six declined, led by communication services down 1.01%, followed by a 0.59% drop in energy. Paramount Global plummeted 5.3% after its agreement on Sunday to merge with Skydance Media, creating a new chapter for one of Hollywood's oldest studios.

Boeing gained 0.55% due to its agreement to plead guilty to a criminal fraud conspiracy charge and pay a $243.6 million fine related to a U.S. Justice Department investigation into two fatal 737 MAX crashes. Advancing issues outnumbered declining ones within the S&P 500 by a ratio of 1.3-to-one.

Volume on U.S. exchanges was relatively low, with 10.1 billion shares traded, compared to an average of 11.6 billion shares over the previous 20 sessions.

(With inputs from agencies.)