The Nasdaq and S&P 500 rallied to record high closes Wednesday, fueled by gains in Nvidia and other Wall Street heavyweights ahead of inflation data and quarterly earnings reports due this week.
It was the Nasdaq's seventh straight record-high close and the S&P 500's sixth straight. The S&P 500 crossed 5,600 for the first time after Federal Reserve Chair Jerome Powell stoked expectations for an interest-rate cut in September.
Powell said in his second day of Congressional testimony that he was not ready to conclude that inflation was moving sustainably down to 2%, although he expressed "some confidence of that."
The Philadelphia semiconductor index surged to record highs after contract manufacturer Taiwan Semiconductor Manufacturing Co posted strong quarterly revenue.
"TSMC's report supported the AI narrative, so that more than anything else today is a pretty important data point," said Thomas Martin, senior portfolio manager at Globalt Investments in Atlanta.
Micron Technology, Nvidia and Advanced Micro each rallied.
Apple climbed to a record high, lifting its stock market value to around $3.6 trillion.
With just a handful of large-cap stocks fueling Wall Street's rally this year, some investors worry about a potential selloff if those companies' earnings fail to meet high expectations.
According to preliminary data, the S&P 500 gained 56.46 points, or 1.01%, to end at 5,633.44 points, 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.
U.S. inflation data due this week include the Consumer Price Index on Thursday and the Producer Price Index report on Friday.
Expectations of a 25-basis-point rate cut by September ticked up to 74% from around 70% on Tuesday and 45% a month ago, according to CME's FedWatch.
Second-quarter earnings season, which kicks off this week with major banks reporting on Friday, will test whether high-flying megacaps can justify expensive valuations and extend their strong runs.
Intuit dropped after the TurboTax owner said it plans to lay off about 10% of its workforce.
Gene-sequencing equipment maker Illumina jumped after it said it was acquiring privately held Fluent BioSciences.
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