Tuesday's Market Highlights: Record Highs for S&P 500 and Nasdaq Amid Fed and Inflation Watch

The S&P 500 and Nasdaq Composite achieved new record highs on Monday. The S&P 500 gained 0.1%, closing at 5,572.85, while the Nasdaq Composite rose 0.28%, finishing at 18,403.74. This marks the fourth positive week in the last five for the S&P 500. However, the Dow Jones Industrial Average slipped by 0.08%, closing at 39,344.79. What to expect today?

Signs of Cooling Inflation

Investors are now focused on key inflation data due later this week. This data could provide more insight into the state of the economy and the possibility of a Federal Reserve rate cut. On Tuesday, Federal Reserve Chair Jerome Powell begins two days of semi-annual Congressional testimony, starting with an appearance before the Senate.

Recent economic data suggests that inflation is cooling, and the job market is showing signs of strain from prolonged tight policy. This has led to increased expectations that the Fed might start cutting interest rates in September.

Despite this, J. Powell emphasized at the European Central Bank’s annual forum in Portugal last week that the Fed needs more data to confirm that inflation has moderated sufficiently. The latest consumer inflation report, due on Thursday, will be closely watched.

Premarket Movers:

Netflix (NASDAQ: NFLX) Sees Stock Boost

Netflix's stock increased by 0.7% on Tuesday morning after TD Cowen raised its price target from 725 to 775, maintaining a buy rating ahead of the second-quarter earnings report. Netflix’s stock is currently extended past a 639 buy point in a cup base pattern, indicating strong market performance.

Oil Prices Dip After Hurricane Beryl

Crude oil prices dropped on Tuesday as Hurricane Beryl caused less damage to key U.S. oil-producing regions than anticipated.

By 04:00 ET, U.S. crude futures (WTI) fell 0.5% to $81.91 a barrel, and the Brent contract declined 0.4% to $85.39 a barrel. Analysts at ING noted that early indications suggest most energy infrastructure along the Texan coast has emerged unscathed.

The American Petroleum Institute is set to release its estimates of weekly crude inventories later in the day, with a draw expected due to the summer driving season.