Stock Market Update: S&P 500 Anticipates Further Gains with Powell's Speech on the Horizon

US stocks are on track to continue their upward momentum on Tuesday as investors eagerly await remarks from Federal Reserve Chair Jerome Powell.

Futures for the S&P 500 saw a modest rise of 0.2%, while those for the Nasdaq 100 increased by 0.4%. Dow Jones Industrial Average futures remained relatively stable. The market's ascent has been fueled by signs of an economic slowdown, which have increased expectations for interest rate reductions. On Monday, the S&P 500 recorded its 35th all-time high of the year, and the Nasdaq Composite also set a new record, thanks to strong performance in semiconductor stocks.

Powell is set to provide his biannual policy update to Congress, starting with a Senate appearance on Tuesday, followed by the House on Wednesday. A significant consumer inflation report is also expected on Thursday, which could be pivotal for market trends.

Despite the bullish sentiment, there is growing caution regarding a potential market pullback. Morgan Stanley strategist Mike Wilson has predicted a 10% market correction. Wall Street is also wary of the upcoming earnings season due to high expectations. Additionally, there is skepticism about the substantial investments in AI-related stocks, given the still unproven impact of the technology.

In corporate news, BP's US-listed shares declined over 4% in pre-market trading after the company cautioned about a downturn in refining and a possible writedown of up to $2 billion. Novo Nordisk shares also dropped following news that its weight-loss drug Wegovy was outperformed by Eli Lilly's Mounjaro in a comparative study.

Chipotle's Appeal Among Lower-Income Customers

Despite social media claims about reduced portion sizes, Chipotle remains popular, particularly with lower-income households. Stifel analyst Chris O'Cull noted strong traffic based on mobile location data, leading him to raise his same-restaurant sales projection from 8.5% to 10%. Growth from lower-income consumers surpassed that from middle- and high-income consumers, indicating a strong value perception of Chipotle's menu across different income levels.

Apple’s Market Cap Reaches New Heights

Apple's market capitalization has surged to $3.5 trillion, with Nvidia close behind at $3.15 trillion. Piper Sandler analyst Matt Farrell highlighted Apple’s 30% stock increase since April, driven by excitement over Apple Intelligence and a potential recovery in iPhone sales in China. While Farrell is optimistic about Apple's growth prospects, he cautions that the current stock price might already reflect much of the positive news, given the high valuation and potential consumer spending challenges.

Also Read: Stock Market Update: S&P 500 and Nasdaq Rise, Fed Rate Cut Speculations Grow