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S&P 500 posts another record close as Fed Chair Powell calls out risks of keeping rates high: Live updates

Michael M. Santiago | Getty Images

The S&P 500 climbed to a fresh record Tuesday after Federal Reserve Chair Jerome Powell warned about the dangers of keeping interest rates high for too long.

The broad market index inched higher by 0.07% to 5,576.98 for its 36th record close of the year. The Nasdaq Composite added 0.14% to close at 18,429.29, also ending the day at a record. Both indexes touched fresh all-time highs during the session. The Dow Jones Industrial Average ticked down 52.82 points, or 0.13%, and ended at 39,291.97.

Powell said keeping interest rates elevated for too long could risk further economic growth, seemingly hinting that the central bank is considering taking a less restrictive stance.

"Reducing policy restraint too late or too little could unduly weaken economic activity and employment," Powell said as part of his semiannual update on monetary policy. "More good data would strengthen our confidence that inflation is moving sustainably toward 2 percent."

Powell will continue testimony this week before Congress on Wednesday before the House Financial Services Committee. His remarks come ahead of key inflation data arriving later this week, with the June consumer price index due on Thursday and the producer price index on Friday.

"The labor market has been weakening and Powell is starting to pay attention," said David Russell, global head of market strategy at TradeStation. "He recognizes that policy is restrictive and progress has been made on inflation. This potentially lays the groundwork for a 'Powell put' later in the year."

Nvidia shares were up 2.5% after KeyBanc hiked its price target on the chipmaker to $180, implying upside of 40% from Monday's close.

A lack of market breadth kept the S&P 500's gains in check, however. Shares of McDonald's and Microsoft slipped 0.8% and 1.4%, respectively.

"The S&P 500 has been driven by a narrow range of tech leaders leveraged to AI tailwinds, while the rest of the market has significantly lagged," Pernas Research co-founder Deiya Pernas said of the S&P 500's fresh record high. "Given the exuberance around AI, we expect this trend to continue in the near to intermediate term."

CNBC's Jeff Cox contributed to this report.

S&P 500 earns another record close

The S&P 500 closed higher on Friday, notching a fresh record close that was set a day earlier.

The broad market index advanced 0.07% to close at 5,576.98. The Nasdaq Composite gained 0.14% to finish the session at 18,429.29, while the Dow Jones Industrial Average pulled back 52.82 points, or 0.13%, to 39,291.97.

— Brian Evans

Wells Fargo warns that stocks are overheating

Stocks are getting ahead of themselves, according to Wells Fargo senior global market strategist Sameer Samana.

In a note Monday, he noted the S&P 500 surged 10.5% from its April 19 lows to July 1, "driven by an increasingly narrow group of growth stocks related to artificial intelligence" — while the index's equal-weighted version was up 2.46% during the same period.

"We believe this combination of narrow market leadership and acceleration to the upside leaves the S&P 500 Index vulnerable to possible disappointment, which could precipitate a pullback," Samana said.

— Fred Imbert

Crude prices fall for third day as oil infrastructure avoids major damage from Beryl

Oil prices fell more than 1% on Tuesday in the third straight day of declines, as Gulf Coast production and refining infrastructure appears to have avoided substantial damage from Tropical Storm Beryl.

On Monday, Beryl made landfall in Matagorda, Texas, as a Category 1 hurricane but later weakened into a tropical storm.

"Brent crude prices ended their 4-week rally as the landing of hurricane Beryl resolved concerns about major production halts for now," Goldman Sachs analyst Yulia Grigsby told clients in a Tuesday note.

But Beryl may serve as a warning of what is to come later in the season. Colorado State University has forecast an "extremely active Atlantic hurricane season." A severe hurricane season poses an upside risk for refining margins, with the backdrop tighter in refining than in crude markets, Grigsby told clients.

— Spencer Kimball

Salesforce weighs on the Dow

The Dow's underperformance on Tuesday is due in large part to the struggles of Salesforce.

Shares of the enterprise software company were down about 2% in afternoon trading. The only other stock in the price-weighted index down at least 2% was the chemical stock Dow, which has a much smaller effect on the average than Salesforce.

Shares of Salesforce are now down more than 4% year to date.

— Jesse Pound

Albemarle shares slide as analysts see guidance at risk due to weak lithium prices

Albemarle shares fell nearly 8% on Tuesday as analysts see the mining giant's guidance at risk due to weak lithium prices.

Baird slashed its price target for Albemarle by $43 to $127 per share, implying 28% upside from Monday's close of $99.15. Oppenheimer cut its target by $10 to $188, suggesting 80% upside.

"With lithium prices returning to declines in June and spot prices moving 10%+ lower, we see the potential for another guidance cut by ALB," Oppenheimer analysts led by Colin Rusch told clients in a note. Baird analysts also view the lithium mining giant's guidance at risk.

Baird and Oppenheimer maintained the equivalent of buy ratings for Albemarle despite cutting the company's stock price target. The analysts argued Albemarle's long-term opportunity is solid given its dominant position in lithium mining, a critical material for electric vehicle batteries.

"We continue to be bullish on the long-term opportunity regarding EVs and ALB's market leading position," Baird analyst Ben Kallo told clients in a note.

— Spencer Kimball

Consumer discretionary spending down versus 2023

Despite an overall resilient consumer discretionary environment, year-to-date spending through the end of June was 7% lower compared to the same period last year, according to Barclays.

"There are signs of trading down to more value-conscious options being seen broadly across consumer sectors," analyst Josh Grasso wrote in a research note on Wednesday.

Grasso highlighted weakness in swimming pool spending, which grew nearly 40% from the previous year in 2021, but fell to negative levels last year. Spending on swimming pools is now down more than 5% year over year in 2024, per Grasso.

Nonetheless, despite the drop in spending over the past two years, the overall level of spending on pools is still higher than pre-Covid and 2020 levels, he added.

— Hakyung Kim

Apple on pace to close at a sixth straight record after touching new intraday high Tuesday

Apple is on course to close at yet another all-time high on Tuesday, surpassing Monday's previous high of $227.82, in what would be its sixth consecutive record close going back to Monday, July 1.

Apple also touched an all-time intraday high of $229.40 on Tuesday, its fifth straight all-time intraday peak.

Apple shares are now higher by 20.3% over the past month, according to FactSet data, mostly reflecting investor enthusiasm for the integration of artificial intelligence into iPhones that was announced at last month's developers' conference.

— Scott Schnipper

18 stocks in the S&P 500 reach new 52-week highs

A worker assists with checkout at a Costco store in Teterboro, New Jersey, on Feb. 28, 2024.
Stephanie Keith | Bloomberg | Getty Images
A worker assists with checkout at a Costco store in Teterboro, New Jersey, on Feb. 28, 2024.

During Tuesday's trading session, 18 stocks in the S&P 500 traded at new 52-week highs.

Of these 18 stocks, 14 names reached new all-time-high levels. Tickers that hit this milestone included:

  • Alphabet C share trading at all-time highs back to the special distribution on April 2, 2014, when the nonvoting share was created, and it began trading on April 3, 2014
  • Alphabet A share trading at all-time highs back to its initial public offering on Aug. 19, 2004
  • Costco trading at all-time-high levels back to its IPO in December 1985
  • Eli Lilly trading at all-time-high levels back to 1952 when the company offered its first public shares of stock
  • Apple Inc. trading at all-time-high levels back to its IPO in December 1980
  • Applied Materials trading at all-time-high levels back to its IPO in October 1972
  • Lam Research trading at all-time-high levels back to its IPO in May 1984

On the other hand, 11 stocks in the broad market index were trading at new 52-week lows. Those names included:

— Lisa Kailai Han, Christopher Hayes

Stocks making the biggest moves midday

CFOTO | Future Publishing | Getty Images

Here are the stocks on the move midday:

  • Nvidia — Shares of the artificial intelligence darling popped 1.8% following KeyBanc's price target hike to $180, which implies about 40% upside from Monday's close. The firm said demand for Nvidia's H100 chip "remains robust" even with the imminent launch of Blackwell in the second half of the year.
  • Helen of Troy — The housewares stock plummeted nearly 28%, hitting a new 52-week low during the session. The company posted an earnings miss for its first quarter of fiscal 2025 before the bell, earning 99 cents per share, excluding items. Analysts polled by FactSet were expecting earnings of $1.59 per share. The company also slashed its full-year guidance.
  • UiPath — The software stock fell 7% after the company announced it is planning on reducing about 10% of its global workforce, with most of the reductions expected to occur by the end of the first quarter in fiscal 2026. The company said this is part of a restructuring plan to manage its operating expenses.

Read the full list here.

— Sean Conlon

Decliners beating advancers on NYSE and Nasdaq on Tuesday on slow summer volume

The number of stocks declining is beating advancers and the percentage of total shares falling is outpacing rising volume on both the New York Stock Exchange and the Nasdaq Stock Market on Tuesday. Total volume at midday is a fraction of the past month's average as summer holidays sap activity.

Declining stocks were recently topping advancing issues by 1,522 to 1,100 on the NYSE, and 2,098 to 1,601 on the Nasdaq. Declining volume totaled a bit more than 50% on the NYSE against 48% rising volume, while on the Nasdaq, it was 54.5% up volume and 44.2% down volume.

Composite volume in NYSE issues was 33% of the past 30 days' average, while the Nasdaq composite volume was more active at 45% of the past month's total. New NYSE 52-week highs were beating new lows, 76 to 66, while on Nasdaq, new lows topped new highs 143 to 140.

— Scott Schnipper

AI stocks outperform Tuesday

Stocks tied to the artificial intelligence theme outperformed Tuesday. Market darling Nvidia was the biggest advancer in the S&P 500, jumping 3% in midday trading even as the broader index gained 0.1%.

Corning was the second-best performing S&P 500 stock. Shares jumped 3% as of midday trading, extending its gains from the previous session when Corning advanced 12% after raising its second-quarter guidance. The company known for developing the Gorilla Glass used in iPhones said the AI boom has boosted demand for its optical connectivity products.

Chip stocks broadly outperformed. The VanEck Semiconductor ETF was higher by 0.4%, bolstered by stocks such as Micron Technology, which was up 2.5%.

Super Micro Computer shares were up nearly 2%.

— Sarah Min

Powell says U.S. growth no longer 'overheated'

Federal Reserve Chair Jerome Powell looks during an open session of the Financial Stability Oversight Council at the Treasury Department in Washington, D.C., on May 10, 2024.
Andrew Caballero-Reynolds | AFP | Getty Images
Federal Reserve Chair Jerome Powell looks during an open session of the Financial Stability Oversight Council at the Treasury Department in Washington, D.C., on May 10, 2024.

Federal Reserve Chair Jerome Powell said Tuesday that the U.S. economy is not running too hot, but still has the strongest growth of any developed nation.

"This is no longer an overheated economy," the central bank leader said in his first day of monetary policy testimony this week. "This is an economy … that is more or less back by most measures to where it was before the pandemic. And that was a strong labor market, but it was not an overheated labor market."

Later in the hearing, he was asked whether any economy in the world is performing better than the U.S.

"None comes to mind as I think in the majors. The answer would be no," he said.

— Jeff Cox

S&P 500, Nasdaq hit fresh record highs

The S&P 500 and Nasdaq Composite hit fresh record highs at the market open on Tuesday, marking the second consecutive session of highs for both indexes.

The Dow Jones Industrial Average lagged, pulling back 62 points, or 0.1%. The S&P 500 added 0.1% while the Nasdaq Composite advanced 0.3%.

— Brian Evans

Chemours, BP among stocks making biggest premarket moves

Check out the companies making headlines before the bell:

  • Chemours The chemical company added about 3% after UBS upgraded the company from buy to neutral, saying the stock could outperform as refrigerants see favorable demand and price drivers heading into next year.
  • BP The oil and gas giant's U.S.-listed shares fell more than 4% after the company warned it expects to report an impairment of up to $2 billion. BP also sees weak margins from its refining business.
  • Tempus AI Shares popped nearly 4% after several Wall Street banks initiated coverage of the health-care diagnostics company with buy or overweight ratings. Tempus AI, which uses artificial intelligence to interpret medical tests, debuted on the Nasdaq in June.

For more, read here.

— Pia Singh

Bill Ackman's Pershing Square begins IPO roadshow

Bill Ackman, founder and CEO of Pershing Square Capital Management.
Adam Jeffery | CNBC
Bill Ackman, founder and CEO of Pershing Square Capital Management.

Pershing Square started a roadshow for the initial public offering of a closed-end investment vehicle, Bill Ackman's firm announced Tuesday.

The IPO price for Pershing Square USA Ltd. is set at $50 per share and the fund is expected to be listed on the New York Stock Exchange with the ticker PSUS. Citigroup, UBS Investment Bank, BofA Securities and Jefferies are acting as global coordinators and bookrunners for the deal, Pershing Square said.

The firm previously said the closed-end fund will invest in 12 to 24 large-cap, investment-grade, "durable growth" companies in North America. It doesn't have a performance fee in place, and Ackman is waiving the management fee for the first 12 months and after the first year will charge a flat 2% fee.

The move to take the vehicle public is widely seen as a way to leverage Ackman's popularity among Main Street investors. The billionaire investor gained a wide following on social media platform X with 1.3 million followers, commenting on issues ranging from antisemitism to the presidential election.

— Yun Li

BP shares tumble on $2 billion impairment charge, lower refining margins

Gasoline pumps out of use as drivers panic-buy fuel at a BP gas station in southeast London, U.K., on Sept. 26, 2021.
CNBC
Gasoline pumps out of use as drivers panic-buy fuel at a BP gas station in southeast London, U.K., on Sept. 26, 2021.

BP shares fell more than 4% on Tuesday after the European oil major warned investors of an impairment charge of up to $2 billion and weaker refining margins in the second quarter.

The post-tax impairment charge, in the range of $1 billion to $2 billion, includes costs related to BP's ongoing review of a refinery in Gelsenkirchen, Germany, as well as other asset costs and contract provisions.

BP also expects lower refining margins for the second quarter, which will have a negative effect of between $500 million and $700 million. The oil major reports quarterly earnings on July 30.

— Spencer Kimball

Investors too optimistic on rate-cut boost for stocks, Vital Knowledge warns

The power of Federal Reserve rate cuts on the stock market could be overstated by investors, according to Adam Crisafulli of Vital Knowledge.

"Our view remains cautious on the SPX as investors are too optimistic about the power of Fed cuts and not focused enough on the softening momentum happening in the economy," he wrote. "The case for rate reductions to start in Sept is strong, but a modest easing cycle, as the approaching one will likely be, won't be enough to immediately halt the growth slowdown presently underway."

— Fred Imbert

Europe markets open lower

European stocks opened lower on Tuesday, with Paris's CAC 40 index down 0.9% while the regional benchmark Stoxx 600 fell 0.43%, as traders continue to assess the implications of a hung parliament in France.

The U.K.'s FTSE 100 was flat while Germany's DAX retreated 0.5%.

The euro held firm, ticking fractionally higher against the U.S. dollar and British pound.

— Jenni Reid

The S&P 500 has notched 35 record closing highs this year

The S&P 500 and Nasdaq Composite on Monday continued their upward march. With the close of the regular trading session, the broad market index has notched 35 record closing highs in 2024, while the Nasdaq Composite has registered 25.

But many investors are anticipating a summer correction, and say investors should broaden their exposure before equities top out.

"You really want to stay broadly diversified," Courtney Garcia, senior wealth advisor at Payne Capital Management, told CNBC's "Closing Bell" on Monday. "I don't think that the momentum trade here is ending, especially in the short term, but when it changes, it's going to change fast. And when you're looking at valuations, there's a lot of opportunities here."

— Sarah Min

Stock futures open little changed

U.S. stock futures opened little changed Monday night.

Dow Jones Industrial Average futures rose 13 points, or 0.04%. S&P 500 futures and Nasdaq 100 futures climbed 0.03% and 0.07%, respectively.

— Sarah Min

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