Stock market today: S&P 500 set to build on record high as Powell kicks off semiannual testimony

US stocks held near records on Tuesday, as investors assessed concerns about a pullback while Federal Reserve chair Jerome Powell kicked off his semiannual update to Congress.
The S&P 500 (^GSPC) edged up about 0.2% after the index booked its 35th record close of the year on Monday, while the tech-heavy Nasdaq Composite (^IXIC) led the way higher with a roughly 0.2% gain following its own record close the day prior. The Dow Jones Industrial Average (^DJI) remained the only major index in the red but pared losses to fall about 0.1%, or around 50 points.
Stocks have achieved fresh all-time highs as signs of a US economic slowdown bolster bets on interest-rate cuts.
Powell shed light on the Fed's picture of the economy, commencing his twice-yearly policy update to Congress on Tuesday with an appearance in the Senate. In prepared remarks, the central bank leader said he's encouraged by evidence of cooler inflation, but that the Fed still needs more "good data" to be confident that inflation is moving towards its 2% target.
Traders still placed bets that the Fed will cut interest rates twice this year. "We’re increasingly confident in our forecast that the Fed will cut rates in September," wrote Oxford Economics chief US economist Ryan Sweet.
Powell will appear before the House on Wednesday, setting the stage for a key update on consumer inflation on Thursday - all potential catalysts for stocks if they confirm a cooling.
But a note of caution is seeping into the market as the idea of a summer pullback gets more backers, with Morgan Stanley strategist Mike Wilson calling for a 10% correction.
Wall Street is getting cold feet about this coming earnings season, given the higher bar of expectations they face this time around. At the same time, investors are starting to question the huge inflows into AI-linked stocks that have driven the recent rally, given the tech's impact is still unproven.
On the corporate front, BP's (BP) US-listed shares fell about 5% in early trading after the energy giant warned of a refining slump and factory-linked writedown of up to $2 billion. Meanwhile, Novo Nordisk (NVO) stock slipped after Wegovy lost out to Eli Lilly's (LLY) Mounjaro in an analysis of rival weight-loss drugs.
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