
The S&P 500 and Nasdaq notched new record closes on Tuesday, marking their sixth consecutive day of gains, buoyed by hopes for interest rate cuts following Federal Reserve Chair Jerome Powell’s semiannual testimony to Congress.
The S&P 500 (^GSPC) edged just above the flatline, achieving its 36th record close this year. The Nasdaq Composite (^IXIC) climbed about 0.1%, adding to its record run.
In contrast, the Dow Jones Industrial Average (^DJI) oscillated throughout the session, ending down roughly 0.1%.
The rally in stocks comes amid signs of a slowing US economy, which has bolstered expectations for rate cuts.
Powell, in his address to the Senate, expressed optimism over cooling inflation but emphasized the need for more “good data” to ensure it aligns with the Fed’s 2% target.
Despite the cautious tone, traders are betting on two rate cuts this year. “We’re increasingly confident in our forecast that the Fed will cut rates in September,” noted Ryan Sweet, chief US economist at Oxford Economics.
Powell’s upcoming testimony before the House on Wednesday, followed by a key update on consumer inflation on Thursday, could further influence market sentiment, particularly if they confirm a cooling trend.
However, some caution is creeping into the market. Morgan Stanley strategist Mike Wilson is forecasting a 10% correction, suggesting that a summer pullback might be on the horizon.
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