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S&P 500 and Nasdaq notch record highs; chipmakers climb

Published 07/08/2024, 06:47 AM
Updated 07/08/2024, 06:56 PM
© Reuters. FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., July 3, 2024.  REUTERS/Brendan McDermid/File Photo
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By Noel Randewich and Ankika Biswas

(Reuters) -The S&P 500 and Nasdaq notched record-high closes on Monday as investors awaited fresh inflation data, commentary from Federal Reserve Chair Jerome Powell and the start of quarterly earnings season.

Nvidia (NASDAQ:NVDA) rose nearly 2%, Intel (NASDAQ:INTC) rallied over 6% and Advanced Micro Devices (NASDAQ:AMD) added 4%, lifting the Philadelphia semiconductor index 1.9%.

Traders will scrutinize consumer price data due on Thursday and producer price data expected on Friday to gauge the Fed's progress in fighting inflation.

Investors worry that waiting too long to cut interest rates could damage the labor market and push the economy into a recession. They will closely monitor Powell's semiannual testimony before U.S. Senate and House committees on Tuesday and Wednesday.

"What investors want to hear is a dovish tone and an acknowledgement that the two-sided risks are more evenly balanced today, in particular, with respect to the labor market," said Ross Mayfield, an investment strategy analyst at Baird.

Expectations for interest rate cuts as early as September grew after Friday's nonfarm payrolls report showed U.S. job growth slowed in June - the latest data to point to weakness in labor market conditions.

Traders now 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 (NYSE:JPM) and Wells Fargo are slated to kick off Wall Street's second-quarter earnings season on Friday. Citigroup shares gained 1.1%, while Wells Fargo lost 1%.

Analysts on average see S&P 500 companies increasing their aggregate earnings per share by 10.1% in the second quarter, up from an 8.2% increase in the first quarter, according to LSEG I/B/E/S.

The S&P 500 climbed 0.10% to end the session at 5,572.85 points.

The Nasdaq gained 0.28% to 18,403.74 points, while the Dow Jones Industrial Average declined 0.08% to 39,344.79 points.

It was the Nasdaq's fifth straight record-high close and the S&P 500's fourth straight.

Of the 11 S&P 500 sector indexes, six declined, led lower by communication services, down 1.01%, followed by a 0.59% loss in energy.

Paramount Global fell 5.3% after it agreed on Sunday to merge with Skydance Media, scripting a new chapter for one of Hollywood's oldest studios.

Boeing (NYSE:BA) gained 0.55% after the planemaker agreed to plead guilty to a criminal fraud conspiracy charge and pay a fine of $243.6 million to resolve a U.S. Justice Department investigation into two fatal 737 MAX crashes.

© Reuters. FILE PHOTO: Traders work on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., July 3, 2024.  REUTERS/Brendan McDermid/File Photo

Advancing issues outnumbered falling ones within the S&P 500 by a 1.3-to-one ratio.

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

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