Nvidia powers Nasdaq to record high; S&P 500 lags as data, earnings parsed
US consumer prices posted their biggest jump in five months in June, hinting that tariffs may be starting to heat up inflation. Still, underlying inflation stayed moderate, offering some reassurance despite the headline spike. Hopes for a July rate cut have all but vanished, and bets on a September move dipped to 55% from 60% after the latest data, according to CME FedWatch.
'It's (CPI data) perfectly in line with expecting the Fed to kind of re-engage on rate cuts at its September meeting,' said Ross Mayfield, investment strategist at Baird.
At 11:33 a.m. ET, the S&P 500 gained 0.71 points, or 0.01%, to 6,269.27, and the Nasdaq Composite rose 136.40 points, or 0.66%, to 20,776.73. The Dow Jones Industrial Average fell 251.28 points, or 0.57%, to 44,208.37.
The Nasdaq was boosted by AI-chip leader Nvidia, which rose 4.4% after unveiling plans to resume sales of its H20 AI chip to China. Other chipmakers also advanced, with Advanced Micro Devices and Super Micro Computer rising more than 6% each. The technology sector rose 1.7% to hit a record high. Meanwhile, Wall Street opened the second-quarter earnings season on a somber note, with banking stocks whipsawing in volatile trade.
JPMorgan Chase slipped 0.4% despite raising its 2025 net interest income outlook, while Wells Fargo fell 5% even as its profit rose on reduced loan-loss reserves. BlackRock notched a new milestone , managing a record $12.53 trillion in assets amid optimism over trade deals and rate cuts, yet its shares slid 5.4%.
The KBW Bank Index sank to a two-week low, down 1.1%. Bucking the trend, Citigroup climbed 3% after its traders delivered a windfall that boosted second-quarter profits. Mayfield, referring to the banks' results, said 'there must have been a higher bar to clear, but most of the reporters so far have beaten estimates, which is what you want to see.' Despite President Donald Trump's renewed tariff threats - this time aimed at Russia - markets largely brushed off the rhetoric, focusing instead on a breakthrough from negotiations with US trade partners. Hopes were buoyed after Trump signaled a willingness to talk following his weekend warning of 30% tariffs on the European Union and Mexico from August 1.
At least four Fed officials including Board Governor Michael Barr are scheduled to speak later in the day, potentially offering fresh clues on the central bank's next steps.
Nine of the 11 S&P 500 sectors were trading in the red. Among other movers, Trade Desk surged 9.7% after the software firm was set to join the benchmark S&P 500 index. Declining issues outnumbered advancers by a 2.65-to-1 ratio on the NYSE and by a 2.06-to-1 ratio on the Nasdaq.
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