US STOCKS-S&P 500 nears record high as Middle East tensions cool

By Kanchana Chakravarty and Nikhil Sharma

June 25 (Reuters) - The benchmark S&P 500 hovered close to an all-time high on Wednesday as an Israel-Iran ceasefire appeared to be holding and investors watched Federal Reserve Chair Jerome Powell's congressional testimony for hints on the monetary policy path.

The S&P 500 .SPX index remains about 0.6% below its peak, hit in February, while the tech-heavy Nasdaq .IXIC is about 0.8% below a record high as the de-escalation in Middle East hostilities supported risk sentiment.

The Nasdaq 100 .NDX - a subset of the Nasdaq composite index - touched an intraday record high.

Despite isolated violations of the ceasefire brokered by U.S. President Donald Trump a day earlier, investors remained optimistic that the truce between the two warring nations would last.

On Tuesday, the first day of Powell's congressional testimony, he emphasized the Fed's wait-and-watch approach to interest rates as tariff-led price pressures kick in. However, he also said a lower-than-expected inflation reading or weakness in the labor market would push the central bank to cut sooner.

Fed Boston President Susan Collins mirrored Powell's stance on Wednesday and said "much will depend on whether the 'price shock' from tariffs dissipates quickly".

"Chair Powell and his team want to digest the data and see what that looks like before they embark on an easing campaign and to me that makes sense," said Bill Fitzpatrick, managing director at Logan Capital Management.

Money market moves show traders are pricing in about 60 basis points of rate cuts by the end of 2025, with a nearly 70% chance of a 25-bps rate cut in September, according to CME Group's FedWatch tool.

At 10:15 a.m. ET, the Dow Jones Industrial Average .DJI fell 45.39 points, or 0.11%, to 43,043.63, the S&P 500 .SPX gained 6.94 points, or 0.11%, to 6,099.12 and the Nasdaq Composite .IXIC gained 72.26 points, or 0.36%, to 19,984.48.

Nine of the 11 major S&P 500 sub-sectors fell. Real estate .SPLRCR and utility .SPLRCU stocks led declines with a 0.7% decline each. On the flip side, the information technology .SPLRCT sector gained 1.1%.

Shares of delivery giant FedEx FDX.N fell 2.9% after the company forecast quarterly profit below estimates as tariffs weighed on global demand.

Among megacap stocks, Tesla TSLA.O shares fell 4.3% as its European sales slumped for the fifth month. Nvidia NVDA.O rose 2.6%.

The Commerce Department's final take on first-quarter GDP is due on Thursday, while Friday's Personal Consumption Expenditures (PCE) report will help investors ascertain the economic effects of Trump's tariffs that have kept global markets on edge since the start of the year.

General Mills GIS.N shares dipped nearly 3% after the packaged food maker forecast annual profit below expectations.

U.S.-listed shares of cybersecurity firm Blackberry BB.N jumped 17.4% after the company raised its annual revenue forecast citing steady demand amid growing online crimes.

Crypto exchange Coinbase Global COIN.O rose 2.6% after Bernstein raised its price target to a Street high.

Declining issues outnumbered advancers by a 1.99-to-1 ratio on the NYSE and by a 1.89-to-1 ratio on the Nasdaq.

The S&P 500 posted 20 new 52-week highs and 3 new lows while the Nasdaq Composite recorded 70 new highs and 33 new lows.