Nvidia Leads Nasdaq, S&P 500 Closes at Record High

The Nasdaq and S&P 500 closed at record highs on Wednesday, boosted by gains for Nvidia and other Wall Street heavyweights ahead of inflation data and quarterly earnings reports due this week.

It was the seventh consecutive close for the Nasdaq at a record high and the sixth in a row for the S&P 500. The S&P 500 surpassed 5,600 for the first time since Federal Reserve Chairman Jerome Powell raised expectations for a rate cut in September.

Powell said on his second day of testimony before Congress that he was not ready to conclude that inflation was headed toward a sustained decline to 2%, although he expressed “some confidence in that.”

Philadelphia’s semiconductor index rose to a record high after contract manufacturer Taiwan Semiconductor Manufacturing Co. reported strong quarterly revenue.

“The TSMC report validated the theory of artificial intelligence, which more than anything else is a pretty significant data point today,” said Thomas Martin, senior portfolio manager at Globalt Investments in Atlanta.

Micron Technology, Nvidia and Advanced Micro saw gains.

Apple’s stock has hit a record high, with its market value rising to about $3.6 trillion.

With only a handful of large-cap stocks leading the gains on Wall Street this year, some investors are concerned about a potential sell-off if earnings from these companies fail to meet lofty expectations.

The S&P 500 added 56.46 points, or 1.01%, to end at 5,633.44, according to preliminary data, while the Nasdaq Composite gained 214.73 points, or 1.17%, to 18,644.02. The Dow Jones Industrial Average rose 425.39 points, or 1.08%, to 39,717.36.

US inflation data due out this week includes the Consumer Price Index (on Thursday) and the Producer Price Index (on Friday).

Expectations of a 25 basis point rate cut by September have risen to 74% from about 70% on Tuesday and 45% a month ago, according to CME’s FedWatch data.

The second-quarter earnings season, which begins this week with the release of reports by major banks on Friday, will be a test of whether fast-growing, large-cap companies can justify their high valuations and extend their winning streak.

Intuit shares fell after the TurboTax owner said it plans to lay off about 10% of its workforce.

Gene sequencing equipment maker Illumina jumped after announcing the acquisition of privately held Fluent BioSciences.