The S&P 500 edged higher on Tuesday as gains in health care and technology stocks helped offset renewed concerns over Federal Reserve independence, just a day before Nvidia’s highly anticipated earnings report.
By early afternoon, the Dow Jones Industrial Average was up 4 points, or 0.1%. The S&P 500 also added 0.1%, while the Nasdaq Composite rose 0.2%.
Markets continued to digest political headlines after President Donald Trump announced the dismissal of Fed Governor Lisa Cook late Monday, citing allegations of mortgage fraud. Cook denied the claims and vowed not to resign, saying the president had no authority to remove her. The move fueled worries about political interference at the central bank, which has traditionally operated independently to maintain U.S. economic credibility.
In corporate news, Eli Lilly shares jumped more than 4% after its once-daily weight-loss pill achieved key trial goals, paving the way for global regulatory approval. Analysts at Truist Securities said the drug could become a multi-billion-dollar product. Regeneron Pharmaceuticals and Henry Schein also gained, lifting health care stocks overall.
Economic data offered a mixed picture. U.S. consumer confidence eased to 97.4 in August, down from 98.7 but still above forecasts of 96.4. Business spending showed strength as new orders for key capital goods rose 1.1% in July, while overall durable goods orders fell 2.8% due to weaker aircraft demand.
Morgan Stanley reaffirmed its expectation of a 25 basis point Fed rate cut in September, followed by quarterly cuts through 2026, with rates expected to settle between 2.75% and 3.0%. Investors now await second-quarter GDP revisions and weekly jobless claims later this week.
On Wall Street, attention turned to Nvidia’s results due Wednesday, seen as a crucial test of the sustainability of the AI-driven tech rally. Analysts forecast a 48% jump in quarterly earnings on nearly $46 billion in revenue. Meanwhile, Apple shares ticked higher after announcing its September 9 fall event, where it is expected to unveil the new iPhone 17.
