US STOCKS-Nvidia powers Nasdaq to record high; S&P 500 lags as data, earnings parsed

By Pranav Kashyap and Nikhil Sharma

July 15 (Reuters) - The Nasdaq cruised to a fresh record high on Tuesday, powered by a jump in Nvidia, while the S&P 500 hovered below its peak, as investors digested an inflation report and a flurry of major bank earnings.

U.S. consumer prices posted their biggest jump in five months in June, hinting that tariffs may be starting to heat up inflation. Still, underlying inflation stayed moderate, offering some reassurance despite the headline spike.

Hopes for a July rate cut have all but vanished , and bets on a September move dipped to 55% from 60% after the latest data, according to CME FedWatch.

"It's (CPI data) perfectly in line with expecting the Fed to kind of re-engage on rate cuts at its September meeting," said Ross Mayfield, investment strategist at Baird.

At 11:33 a.m. ET, the S&P 500 .SPX gained 0.71 points, or 0.01%, to 6,269.27, and the Nasdaq Composite .IXIC rose 136.40 points, or 0.66%, to 20,776.73.

The Dow Jones Industrial Average .DJI fell 251.28 points, or 0.57%, to 44,208.37.

The Nasdaq was boosted by AI-chip leader Nvidia NVDA.O, which rose 4.4% after unveiling plans to resume sales of its H20 AI chip to China.

Other chipmakers also advanced, with Advanced Micro Devices AMD.O and Super Micro Computer SMCI.O rising more than 6% each.

The technology sector .SPLRCT rose 1.7% to hit a record high.

Meanwhile, Wall Street opened the second-quarter earnings season on a somber note, with banking stocks whipsawing in volatile trade.

JPMorgan Chase JPM.N slipped 0.4% despite raising its 2025 net interest income outlook, while Wells Fargo WFC.N fell 5% even as its profit rose on reduced loan-loss reserves. BlackRock BLK.N notched a new milestone , managing a record $12.53 trillion in assets amid optimism over trade deals and rate cuts, yet its shares slid 5.4%.

The KBW Bank Index .BKX sank to a two-week low, down 1.1%.

Bucking the trend, Citigroup C.N climbed 3% after its traders delivered a windfall that boosted second-quarter profits.

Mayfield, referring to the banks' results, said "there must have been a higher bar to clear, but most of the reporters so far have beaten estimates, which is what you want to see."

Despite President Donald Trump's renewed tariff threats - this time aimed at Russia - markets largely brushed off the rhetoric, focusing instead on a breakthrough from negotiations with U.S. trade partners.

Hopes were buoyed after Trump signaled a willingness to talk following his weekend warning of 30% tariffs on the European Union and Mexico from August 1.

At least four Fed officials including Board Governor Michael Barr are scheduled to speak later in the day, potentially offering fresh clues on the central bank's next steps.

Nine of the 11 S&P 500 sectors were trading in the red. Among other movers, Trade Desk TTD.O surged 9.7% after the software firm was set to join the benchmark S&P 500 index .SPX.

Declining issues outnumbered advancers by a 2.65-to-1 ratio on the NYSE and by a 2.06-to-1 ratio on the Nasdaq.

The S&P 500 posted 21 new 52-week highs and eight new lows, while the Nasdaq Composite recorded 64 new highs and 46 new lows.