S&P 500, Nasdaq set records as European bourses fall

Fed chair Jerome Powell pointed to 'modest' progress in countering inflation in congressional testimony that kept alive the odds of interest rate cuts in 2024 (Kevin Dietsch)
Fed chair Jerome Powell pointed to 'modest' progress in countering inflation in congressional testimony that kept alive the odds of interest rate cuts in 2024 (Kevin Dietsch)

Major US equity indices edged to new records Tuesday following congressional testimony from Federal Reserve Chair Jerome Powell, while Europe's main stock markets were dragged lower by political uncertainty in France.

Both the S&P 500 and Nasdaq eked out  all-time highs after Powell pointed to "modest" progress in the battle to counter inflation. The Dow retreated slightly.

"More good data would strengthen our confidence that inflation is moving sustainably toward two percent," Powell told a Senate panel in remarks that kept alive hopes for potential interest rate cuts later this year.

The tech-rich Nasdaq finished at 18,429.29, up 0.1 percent, its sixth straight record.

"So much good news is already discounted in the market that it would be easy for it to get a bit of news that's negative and then correct," said Tom Cahill of Ventura Wealth Management. "It's gone so far so fast."

But the Paris CAC 40 fell 1.2 percent -- following on Monday's 0.6-percent drop -- as investors fretted over the results of Sunday's elections, which produced a badly divided parliament where the largest block of seats were won by a left-wing alliance.

The French stock market "is the weakest performer in Europe," noted Kathleen Brooks, research director at XTB.

"Although France has no clear leader right now, the prospect of a far-left party calling the shots and increasing both taxes and spending is worrying investors, and thwarted hopes of a post-election recovery rally in French assets and the euro," she said.

London's top-tier FTSE 100 index fell 0.7 percent, dragged down by a four-percent drop in BP shares after the British energy giant warned second-quarter earnings could take an impairment hit of up to $2 billion.

In the United States, investors are also looking to consumer inflation data due out Thursday for further indications that price increases are still easing as hoped, which would give the Fed greater confidence to start cutting rates.

Wall Street's main indices had mostly advanced on Monday, with the S&P 500 and Nasdaq both reaching new records.

The optimistic mood continued into Asia, with Tokyo climbing two percent to close at a record high.

Shanghai reversed early losses to end 1.3-percent after Moo Ratings revised up its 2024 GDP forecast for China to 4.5 percent.

Among individual companies, Boeing fell 1.4 percent after reporting it delivered 44 planes in June, its best month so far in 2024. However, overall commercial plane deliveries for the second quarter still dropped by nearly one-third to 92.

Tesla jumped 3.7 percent, rising for the 10th straight session amid anticipation of the company's presentation on "Robotaxis" next month.

- Key figures around 2040 GMT -

New York - Dow: DOWN 0.1 percent at 39,291.97 (close)

New York - S&P 500: UP 0.1 percent at  5,576.98 (close)

New York - Nasdaq composite: UP 0.1 percent at 18,429.29 (close)

London - FTSE 100: DOWN 0.7 percent at 8,139.81 (close)

Paris - CAC 40: DOWN 1.6 percent at 7,508.66 (close)

Frankfurt - DAX: DOWN 1.3 percent at 18,236.19 (close)

EURO STOXX 50: DOWN 1.3 percent at 4,903.62 (close)

Tokyo - Nikkei 225: UP 2.0 percent at 41,580.17 points (close)

Hong Kong - Hang Seng Index: FLAT at 17,523.23 (close)

Shanghai - Composite: UP 1.3 percent at 2,959.37 (close)

Euro/dollar: DOWN at $1.0819 from $1.0824 at 2030 GMT on Monday

Euro/pound: UP at 84.56 pence from 84.52 pence

Pound/dollar: DOWN at $1.2790 from $1.2807

Dollar/yen: UP at 161.29 yen from 160.83 yen

West Texas Intermediate: DOWN 1.1 percent at $81.41 per barrel

Brent North Sea Crude: DOWN 1.3 percent at $84.66 per barrel