S&P 500 rises as Powell notes inflation progress, Tesla gains

Stocks moved higher Tuesday after Federal Reserve Chairman Jerome Powell noted progress in inflation but reiterated that the central bank was not quite ready to cut rates. The S&P 500 moved in different directions as Tesla shares rose and Nvidia shares fell.

He Dow Jones Industrial Average was trading 32 points lower. S&P 500 Index added less than 0.1% and the Nasdaq Composite Index gained 0.1%.

"We have made good progress in reducing inflation to our objective," Powell said. saying at a central bank forum. "We want to have more confidence that inflation is coming down sustainably towards 2% before we start the process of reducing the exchange rate or easing policies."

Treasury yields edged lower after Powell's comments and the major averages rose from session lows.

Tesla shares supported the S&P 500 after Elon Musk's electric vehicle company reported better-than-expected second-quarter deliveries. The stock, which had a rough first half, rose more than 8.5%.

Nvidia Shares fell about 2%, dragging down the S&P 500, as investors wondered whether the darling of artificial intelligence could continue its big year. Shares are up about 146% in 2024. Eli LillyAnother winner in the first half of the year, saw its shares fall 1.6%.

"Nvidia's recent risky trading pattern is concerning in that it has added volatility, but it has also allowed investors who missed the initial uptrend to enter the market," said Quincy Krosby, chief global strategist at LPL Financial. "However, if volatility in the chipmaker and other big tech names continues, it could signal the market is recalibrating toward a rotation."

Krosby added that while his firm expects to see pockets of volatility in the market, he believes July could end with a gain, particularly if the economy continues to cool at a steady pace.

Wall Street is coming off a slightly positive start to the first half of the year. The tech-heavy Nasdaq Composite gained 0.8% to close at a record high, while the S&P 500 rose 0.3%. The Dow managed a small gain.

Trading volume is likely to be moderate this week. The New York Stock Exchange closes early at 1:00 p.m. (US Eastern Time) on Wednesday and will remain closed on Thursday for Independence Day.