Key points:

  • American stock indices showed slight growth.
  • The S&P 500 and Nasdaq hit record highs.
  • Investors expect the Fed to cut interest rates.

On Tuesday, American stock indices showed slight growth, reaching record levels for the S&P 500 and Nasdaq. Investors, closely watching comments from Federal Reserve officials, were trying to pick up signals about a possible cut in interest rates.

The release of quarterly earnings from Nvidia, Wall Street’s third-largest company by market capitalization, scheduled for after market close on Wednesday is expected to be a key factor that could influence market dynamics. At the same time, this publication will test the sustainability of artificial intelligence stocks in the face of their rapid growth.

S&P 500 closed at a record level

The Dow Jones Industrial Average gained 0.17%, the S&P 500 added 0.25% and the Nasdaq Composite added 0.22%. The Nasdaq hit its fourth record close in the last six sessions, and the S&P closed at a record level for the first time since May 15.

Shares of chipmaker Nvidia rose 0.64%, hitting a record high and approaching a market capitalization of $200 billion. Nvidia options are expected to rise 8.7% by Friday, May 24.

At the same time, shares of retail goods companies fell 0.36% as earnings season ended. JPMorgan Chase shares rose 2.01%, recouping some of Monday’s decline, supporting gains in the S&P 500 banking index.

Traders are looking for clues from the Fed

Investors are awaiting with interest the publication of the minutes of the latest Fed meeting, which is scheduled for Wednesday. On Tuesday, several Fed officials reiterated the need for the central bank to exercise restraint before moving to cut interest rates.

The Fed remains data-driven, so its actions will be based on its analysis. Despite this, Wall Street continues to predict that the Fed will begin cutting rates as early as September.

Markets currently place the probability of a rate cut of at least 25 basis points at the September Fed meeting at 64.8%.