Stocks rose Tuesday as Federal Reserve Chair Jerome Powell noted progress on inflation, but reiterated that the central bank was not quite ready to cut rates.

The S&P 500 gained 0.62%, ending at 5,509.01 and marking its first close above the 5,500 threshold. The Nasdaq Composite jumped 0.84% to settle at 18,028.76. Both indexes closed at record highs, buoyed by a 10% jump in Tesla. The Dow Jones Industrial Average added 162.33 points, or 0.41%, closing at 39,331.85.

"We've made quite a bit of progress in bringing inflation back down to our target," Powell said at a central banking forum. "We want to be more confident that inflation is moving sustainably down toward 2% before we start the process of … loosening policy."

Treasury yields eased a bit following Powell's comments, and the major averages rose from their lows of the session.

Tesla shares lifted the S&P 500 as Elon Musk's electric vehicle company reported better-than-expected deliveries for the second quarter.

Nvidia shares fell 1.3%, weighing on the S&P 500, as investors questioned whether the artificial intelligence darling could continue its big year. The shares are up roughly 147% in 2024. Drugmaker Eli Lilly, another winner from the first half of the year, saw shares drop about 0.8%.

"The dicey pattern in Nvidia's recent trading is concerning in the sense that it has added volatility, but it has also allowed investors who missed the initial upwards trend to come in," said Quincy Krosby, chief global strategist for LPL Financial. "If the choppiness in the chipmaker and other big tech names continue, however, it could indicate that the market is recalibrating towards a rotation."

Krosby added that although her firm expects to see pockets of volatility in the market, she does think July can end with a gain — particularly if the economy continues to cool at a stable pace.

Wall Street is coming off a positive session to start the second half of the year. The tech-heavy Nasdaq Composite added 0.8% to close at a record, while the S&P 500 rose 0.3%. The Dow eked out a small gain. The S&P 500 climbed 14.5% in the first half of the year.

Trading volume is likely to be muted this week. The New York Stock Exchange closes early at 1 p.m. ET on Wednesday and will be shut on Thursday for Independence Day.

Stocks close higher

Stocks ended Tuesday on a positive note.

The S&P 500 added 0.62% to close at 5,509.01, closing above the 5,500 level for the first time. The technology-heavy Nasdaq gained 0.84% to 18,028.76. The Dow Jones Industrial Average inched 0.41%, or 162.33 points, higher, to finish the session at 39,331.85.

— Pia Singh

Market must weigh economic growth and AI, Citi says

The S&P 500 has more room to run in the second half of this year, but investors should be prepared for a bumpy ride with interest rate cuts on the horizon, according to Citi.

Managing director Scott Chronert said economists at the bank are expecting a recession in the second half of this year and three interest rate decreases from the Federal Reserve beginning in September. Now, he said the question is if broadly weak economic activity can dampen the artificial intelligence euphoria that has driven the market higher.

"All told, investors should expect more volatility as we approach a Fed pivot," he told clients. "This favors price momentum."

Chronert noted that the technology-heavy Nasdaq Composite has the most bullish sentiment, while the S&P 500's is not as strong.

— Alex Harring

This contrarian trade has more room to run, according to Wolfe Research

This contrarian trade to go long Tesla and short Nvidia may have more room to run based on the recent price action in the electric vehicle stock, according to Wolfe Research.

"Within the MAG7, TSLA remains our favorite tactically, as the recent breakout looks like it wants to test $230," said technical analyst Rob Ginsberg.

Tesla shares popped 8% Tuesday on the back of better-than-expected delivery numbers for the second quarter. Shares jumped 6% Monday.

— Samantha Subin

Lazard top strategist sees three Fed cuts before end of the year

Lazard chief market strategist Ronald Temple said in a second-half outlook that his base case is for the Fed to start cutting interest rates in September, with two additional cuts later in the year.

Those three total cuts, of 25 basis points each, would be more than the one cut the Fed signaled in its June meeting and more than the two cuts implied by the Fed fund futures market, according to the CME FedWatch Tool. One basis point is equal to 0.01 percentage points.

"By September, the FOMC will have three additional inflation and labor market reports to determine whether price pressures have been capped," the note said.

— Jesse Pound

Wells Fargo sees data center construction spending doubling next year

Wells Fargo reiterated its view that data center construction spending will double in 2025 and remain strong for several years. The comment from analyst Joseph O'Dea comes as the Census Bureau provides more details around data center construction spending. Traditionally, this activity had been lumped into the office category, and was masking how much office spending was slowing.

In May, U.S. data center put-in-place construction spending was $27 billion, on an annualized seasonally adjusted basis, up from $16 billion in the year-ago period.

Meanwhile, office construction spending, excluding the impact of data center building, has fallen 25% from its peak in 2022, Wells Fargo said.

"In Dec 2022, private office annualized spend including data center was $88B. It's now $82B. Within that, data center has gone from $14B to $27B while office ex-data center has fallen from $74B to $55B," O'Dea wrote in a note to clients.

— Christina Cheddar Berk

Apple sets new all-time intraday high north of $220 a share

Apple set a new all-time intraday high of $220.34 on Tuesday, eclipsing the prior intraday peak of $220.20 set on June 12, according to FactSet data.

Meanwhile, Apple is also on pace to set a second consecutive closing record on Tuesday, beating out Monday's $216.75 close.

Apple has rallied more than 30% in the past three months, according to FactSet, fueled by optimism surrounding plans to introduce artificial intelligence technology to its iPhones and other products announced at a developers conference in early June.

— Scott Schnipper

Consumer discretionary stocks outperform Tuesday

Consumer discretionary led the S&P 500's move higher on Tuesday.

Tesla's 8% jump on the back of its stronger-than-expected delivery numbers led the sector's gains. CarMax, Airbnb and Ulta all gained more than 2% each.

Communication services was the following best-performing sector, rising 0.7%. Paramount added 2.7%, followed by Charter Communications and Alphabet shares up more than 1% each.

— Hakyung Kim

Crypto will get positive legislation after the election no matter who wins, says Galaxy's Novogratz

Bitcoin has been stuck in a narrow trading range between $60,000 and $70,000 — aside from a couple of outside blips — since the beginning of March and could remain that way until there is new news, according to Galaxy Digital's Mike Novogratz. The biggest news for the rest of the year could come around the U.S. presidential election.

"Crypto should be bipartisan and needs to be bipartisan," Novogratz told CNBC's "Squawk Box" on Tuesday. "Most Democrats outside of Elizabeth Warren and a small group of people are pretty pro-innovation and pro-crypto."

Novogratz said he has been a backer of Joe Biden but maintained he has supported politicians of both parties who are supportive of crypto innovation. Historically, Republican politicians have held more crypto-friendly views while Democrats have been more hostile. In recent weeks, Donald Trump's campaign has positioned him as the crypto candidate in the upcoming election.

"That said, that's all shifting," Novogratz added. "No matter who wins the next election — we're gonna get positive crypto legislation. I know that."

Further to that point, TD Cowen recently said a sweep of the executive and legislative branches by either Democrats or Republicans in November could spell more risk to crypto assets, while a divided government would be best for the industry. For more on why, read our full story here.

— Tanaya Macheel

Tesla leads autonomous tech ETF higher

The ARK Autonomous Technology & Robotics ETF (ARKQ) is up more than 1.5%, putting it on track for its best day since June 12 when the exchange-traded fund gained 1.57%.

Leading stocks in the ETF include Archer Aviation, Joby Aviation, Tesla and Velo3D, which are all up more than 5% as of Tuesday morning.

— Hakyung Kim

Fed's Goolsbee expresses caution about keeping rates high

Chicago Federal Reserve President Austan Goolsbee cautioned Tuesday that the central bank needs to be careful how tight it is with monetary policy as the economy shows signs of softening.

"I see some warning sign the real economy is weakening. It started from a very hot level, it's weakened to something that's still quite strong," Goolsbee said in an interview with CNBC's Sara Eisen. "But if you're going to be this restrictive for too long, you're going to have to start thinking about that real side of the economy."

Goolsbee, who does not vote this year on the rate-setting Federal Open Market Committee, added that the "arc of inflation is clearly down," though he did not specify as to when he thinks the Fed could start lowering interest rates.

— Jeff Cox

Deutsche Bank sees four risks to market outlook in second half of 2024

Investors face four key risks as they look at the second half of 2024, London-based Deutsche Bank macro strategist Henry Allen wrote in a note out Tuesday. "It's worth keeping an eye on these risks as we move into H2, as recent years have repeatedly shown that surprises can be just around the corner," he said.

1. Economic "data has been surprising on the downside over recent weeks."
2. "Investors are becoming more nervous about fiscal policy given higher levels of debt and interest rates."
3. "Inflation lingering above target."
4. "Monetary policy lags that are still working through."

"The impact of tighter monetary policy is still being felt. In particular, fixed rate borrowers are refinancing at higher rates, whilst central banks like the Fed are still running down their balance sheets" in a policy known as quantitative tightening, Deutsche Bank said.

— Scott Schnipper

Stocks making the biggest moves midday

Here are the stocks on the move midday:

• Tesla – Tesla surged nearly 9% after the electric vehicle company reported stronger-than-expected second-quarter deliveries. The Elon Musk-led company delivered 443,956 vehicles, while analysts polled by StreetAccount expected deliveries of 439,000. The figure showed a 4.8% decline from a year ago but was 14.8% above first-quarter numbers.
• Polestar – The EV manufacturer tumbled 7% after its first-quarter loss widened to $274.3 million from $37.7 million a year ago. Polestar reported an 80% increase in car deliveries in the second quarter of 2024 compared to the first.
• Paramount Global – Shares of the owner of CBS and MTV rose 3% after CNBC reported that it was in talks with several companies concerning a potential merger of its Paramount+ streaming service. Warner Bros. Discovery is one of the companies that has expressed interest in reaching a deal that would combine Paramount+ with Max, according to people familiar with the matter. Warner Bros. Discovery rose about 1.4%.

Read the full list here.

— Sean Conlon

Pure Storage poised for worst day in 2024 following UBS downgrade

Pure Storage tracked for its worst day since November on the heels of a bearish downgrade by UBS.

Shares tumbled 4.2% in midday trading. If its losses hold through session close, it will mark the data storage stock's biggest one-day decline since late November, when shares tumbled more than 12% in a session.

Tuesday's decline comes after UBS analyst David Vogt pulled down his rating to sell from neutral. Vogt added $3 to his price target to $47, but that still implies downside from Monday's closing level.

Vogt said the company's valuation was unjustified amid increased competition. He also called the stock's risk-to-reward ratio "unfavorable."

Despite Tuesday's retreat, shares are still higher by more than 75% this year.

— Alex Harring

Job openings top 8 million in May, more than expected

Employment opportunities increased at a faster-than-expected pace in May while hiring also picked up, the Labor Department reported Tuesday.

The Job Openings and Labor Turnover Survey showed vacancies at 8.14 million, up more than 200,000 from April and above the 7.9 million Dow Jones forecast. That left the ratio of openings to unemployed workers at 1.2 to 1.

Hires increased to 5.76 million, up 141,000 on the month, while separations totaled 5.42 million, an increase of 85,000. Quits were virtually unchanged at 3.46 million.

— Jeff Cox

GE Aerospace gains as much as 2% Tuesday after renewing CEO Culp's contract through 2027

GE Aerospace rose as much as 2% intraday Tuesday, bringing its year-to-date gain to 59%, after renewing CEO Lawrence Culp's employment contract through at least 2027, and possibly through 2028, according to a filing made late Monday to the U.S. Securities and Exchange Commission.

Culp's previous employment agreement was due to expire Aug. 17, 2024. Culp, who has led GE since 2018, will receive a base salary of $2 million a year, a target annual bonus that is 200% of the base salary, an annual stock award of $15.25 million starting in 2025 and a one-time equity performance award tied to compound annual growth rate for adjusted earnings per share in the four years through 2027.

"The combination of this performance condition and service conditions is intended to promote the continued alignment of Mr. Culp's compensation during the term of the agreement with the Company's long-term value creation," GE said in the filing.

— Scott Schnipper

Nvidia falls as recent struggles continue

Nvidia shares fell about 1.9% in early Tuesday trading, adding to the artificial intelligence darling's recent decline. This week, the stock is down more than 1.3%. It is also trading more than 10% below a record high reached last month.

Over the past month, shares are still up more than 11.2%.

— Fred Imbert

Chewy shares slide another 4%

Chewy shares fell another 4% Tuesday following a near 7% sell-off in the previous session. The volatile trading this week was partly triggered by a U.S. Securities and Exchange Commission filing that showed meme stock trader "Roaring Kitty" took a 6.6% stake in the pet food e-commerce retailer.

Meanwhile, Chewy's share price has also been affected by sales of stock from the private equity firm BC Partners, which is its largest shareholder. Many believe BC could use any rally in Chewy stock to sell more of its stake, putting a temporary ceiling on the shares.

— Yun Li

Eli Lilly, Novo Nordisk shares tumble as Biden, Sanders call for price cuts on blockbuster weight loss and diabetes drugs

Shares of Eli Lilly and Novo Nordisk tumbled 3% each after President Joe Biden and Senator Bernie Sanders called on the drugmakers to cut prices for their blockbuster weight loss and diabetes drugs in an op-ed published by USA Today on Tuesday.

Novo Nordisk's Ozempic, which treats Type 2 diabetes, has a list price of more than $900 a month, while Wegovy, which is used to treat obesity, can cost more than $1,300 for a four-dose package. Both brands contain semaglutide as the active ingredient. Eli Lilly's tirzepatide, which is sold as Mounjaro for Type 2 diabetes and Zepbound for obesity, can run patients as much as $1,100 per month.

"These drugs have the potential to be a game changer for people throughout the world struggling with Type 2 diabetes and obesity. But, as important as these drugs are, they will not do any good for the millions of patients who cannot afford them," the two Democrats wrote. They added that the cost of the drugs could put severe financial pressure on the U.S. health-care system.

Under Biden's administration, Medicare has begun to negotiate prices for the program's costliest drugs. Medicare currently does not cover the cost of medications for weight loss.

Analysts see sales of the drugs reaching more than $100 billion by the end of the decade.

— Christina Cheddar Berk

Tesla pops on stronger-than-expected delivery numbers

Tesla shares jumped 4% after the electric vehicle company posted stronger-than-expected delivery numbers for the second quarter.

Deliveries for the period came in at 443,956, topping a StreetAccount estimate of 439,000. Tesla said it produced 411,000 vehicles.

— Samantha Subin

Stocks making the biggest moves premarket

Check out some of the companies making headlines in premarket trading:

• Tesla — The electric vehicle stock declined 1.5% before the bell, following a 6% jump during Monday's session as the company is slated to report second-quarter delivery numbers Tuesday morning.
• Atlassian Corporation — Shares advanced nearly 2% following an upgrade to overweight from Piper Sandler. Analyst Rob Owens opined that as consumers migrate their data to the cloud, the software stock could find growth. Owens added that the stock's current price is an attractive entry point for investors.
• Paramount Global — Stock in the legacy media company climbed more than 3% following news that its streaming arm was in talks with several companies concerning a potential merger. One of the parties involved is Warner Bros. Discovery and would potentially see Paramount+ merge with Max, CNBC previously reported.

Read the full list here.

— Brian Evans

Paramount shares rise on news media giant is looking for a streaming partner

Shares of Paramount Global were up nearly 4% in the premarket. CNBC reported Monday that the company is holding talks with other shops about merging its Paramount+ streaming service with another platform. One of the companies interested in such a move is Warner Bros. Discovery, according to people familiar with the matter.

— Fred Imbert

May JOLTS report set to release Tuesday

The May job openings and labor turnover survey is set to release Tuesday morning. Economists polled by Dow Jones anticipate the number of job openings last month to have fallen to 7.9 million, down from 8.1 million in April.

The data is due out 10 a.m. ET.

— Sarah Min

Stock futures open flat

Stock futures opened little changed Monday night.

Dow Jones Industrial Average futures fell 9 points, or 0.02%. S&P 500 futures and Nasdaq 100 futures dipped 0.01% and 0.02%, respectively.

— Sarah Min