The S&P 500 and the Nasdaq Composite closed at record highs Tuesday after Federal Reserve Chair Jerome Powell said policymakers have made "quite a bit of progress" against inflation.
The tech-heavy Nasdaq rose 0.8% to 18,028.8, following a record close in the previous session, while the S&P 500 gained 0.6% to 5,509. The Dow Jones Industrial Average advanced 0.4% to 39,331.9. Consumer discretionary led the gainers among sectors, followed by financials. Only health care and energy saw declines.
Powell said the central bank's Federal Open Market Committee has made "quite a bit of progress" in bringing inflation back to its target, but it needs to see more encouraging data before lowering interest rates, CNBC reported.
"The last (inflation) reading and the one before it to a lesser extent, suggest that we are getting back on the disinflationary path," Powell reportedly said at a central banking forum in Portugal. "We want to be more confident that inflation is moving sustainably down toward 2% before we start the process of reducing or loosening policy."
The FOMC increased its benchmark lending rate by 525 basis points from March 2022 through July 2023 to combat inflation, but it has since held monetary policy steady, with its latest pause coming last month.
The US 10-year yield fell five basis points to 4.43% Tuesday, while the two-year rate dropped 3.5 basis points to 4.74%.
In economic news, US job openings and layoffs rose in May, according to the Bureau of Labor Statistics' Job Openings and Labor Turnover survey.
The survey showed "no major cracks" in the labor market, Oxford Economics said in a note. "The labor market is healthy enough to allow the Fed to be patient before lowering interest rates, although recent favorable inflation data give the Fed more latitude to respond to any surprising signs of weakness in the labor market," the firm said.
West Texas Intermediate crude oil slipped 0.4% to $83.30 a barrel.
In company news, Tesla (TSLA) shares jumped 10%, the best performer on the S&P 500 and the Nasdaq, after the electric-vehicle maker logged stronger-than-expected second-quarter deliveries, which Wedbush Securities said indicate the worst is over for the company.
Incyte (INCY) saw one of the steepest declines on the S&P 500, down 3%, as BMO Capital downgraded the stock to underperform from market perform and adjusted its price target to $48 from $52.
Gold was little changed at $2,339 per ounce, while silver rose 0.7% to $29.83 per ounce.