US STOCKS-Wall Street rises as Fed minutes put rate cuts in focus, Nvidia hits $4 trillion milestone

By Sinéad Carew and Pranav Kashyap

July 9 (Reuters) - Wall Street indexes closed higher on Wednesday after Federal Reserve meeting minutes fueled hopes that inflation pressures from President Donald Trump's tariffs would not derail interest rate cuts this year and the tech-heavy Nasdaq led gains as Nvidia briefly reached a $4 trillion valuation.

The minutes for the mid-June meeting showed that most Fed officials said they expect rate cuts will be appropriate later this year, with price shocks from Trump's import taxes expected to be "temporary or modest." However, there was little support for a rate cut at the end of July meeting.

Nvidia NVDA.O finished higher after it became the world's first company to hit a $4 trillion market value on Wednesday morning, solidifying its position as one of Wall Street's most favored stocks to tap in the ongoing surge in demand for artificial intelligence technologies.

"Fed officials suggested that they believe inflation will be higher down the road. At the same time, many or most officials suggested that they expect lower interest rates at some point this year. Those two things don't match," said Chris Brigati, chief investment officer at SWBC, an investment company in San Antonio, Texas.
"Perhaps they're starting to put a little bit more weight into what's going on with the labor market."

Besides Nvidia, other market boosts came from megacap companies including Microsoft Corp MSFT.O and Amazon.com AMZN.O.

"There's definitely a megacaps bias. ... To some extent it's a flight to safety but not what you would traditionally think of as a safety trade," said Kevin Gordon, senior investment strategist at Charles Schwab. "From a trade standpoint it's not like you're getting much clarity."

According to preliminary data, the S&P 500 .SPX gained 36.36 points, or 0.58%, to end at 6,261.88 points, while the Nasdaq Composite .IXIC gained 189.34 points, or 0.93%, to 20,607.23. The Dow Jones Industrial Average .DJI rose 214.23 points, or 0.48%, to 44,450.53.

While Wall Street indexes had fallen on trade jitters on Monday, they have steadied since then, with analysts noting that investors have become used to Trump's pattern of saber-rattling on tariffs. And with the deadline for the latest tariffs pushed to August 1, many are betting that negotiations will defuse the trade war.

Trump on Wednesday issued letters to seven countries, calling for tariffs of 30% on Algeria, Iraq, Libya and Sri Lanka, 25% on Brunei and Moldova, and 20% on the Philippines. The European Union has said it could reach an outline trade agreement with the U.S. in the coming days.

On Tuesday, Trump had ramped up his trade offensive with the announcement of a 50% tariff on copper and a vow to slap long-threatened levies on semiconductors and pharmaceuticals. On Monday, Trump hit 14 trading partners with a fresh wave of tariff warnings, including Japan and South Korea.

"The market is becoming a little desensitized to the bad news of tariffs. ... You had three months of still constructive growth and things have not been that bad so the market's saying maybe we can get through these tariffs," said SWBC's Brigati.

After last week's record closes for the S&P 500 and the Nasdaq - buoyed by a surprisingly robust jobs report -investors are turning their attention to Thursday's initial jobless claims for the next pulse check on the labor market.

Among individual stocks, AES Corp AES.N rallied after Bloomberg reported that the power provider was exploring options, including a sale.

Boeing BA.N shares advanced as Susquehanna raised its price target after the planemaker reported on Tuesday that its airplane deliveries in June increased 27% on a yearly basis.

UnitedHealth Group UNH.N shares slipped after the Wall Street Journal reported that the U.S. Department of Justice was investigating how the health insurer deployed doctors and nurses to gather diagnoses that increased its Medicare payments.