The S&P 500 has taken another step toward a new record high. How could it be otherwise, when the American economy is standing strong, the Federal Reserve is preparing to resume a cycle of monetary expansion, and the market leader NVIDIA is expected to report strong earnings?

Investors are ignoring the US president's attempts to remove FOMC member Lisa Cook, a first in the 111-year history of the central bank. Why worry, if the Fed already plans to do what Donald Trump wants: cut rates?

US Stock Index Performance

The muted reaction of the S&P 500 to the Lisa Cook dismissal affair shows that the market has learned not to listen to what is said, but to watch what is done. If it were otherwise, the broader stock index might have been spooked by Trump's threat to impose 200% tariffs on China if it continues to obstruct US access to rare earth metals, or by Commerce Secretary Howard Latnik's statement that the White House is ready to exchange its support for the defense sector in return for a company stake—just like with Intel.

The United States is turning into a developing country, where the president dictates to the central bank and the state becomes a shareholder in local corporations. This is fraught with capital flight and a correction for the S&P 500. Nevertheless, investors prefer to take a wait-and-see approach.

There is a certain risk here. If Trump manages to secure a majority at the FOMC, it would set a historic precedent of a puppet central bank. Investors have no template for this. There are examples from Britain and France where, against a backdrop of mass sell-offs due to distrust of government actions, bond yields soared and the pound and euro fell against major competitors. The behavior of the broad US stock index in such a scenario remains unclear.

US Treasury Yields Performance

For now, the S&P 500 is capitalizing on falling Treasury yields and positive U.S. economic data. Durable goods orders and the Consumer Confidence Index both exceeded Bloomberg's forecasts. Meanwhile, the chance of a federal funds rate cut in September remains high—87%. Such a combination gives the green light for U.S. stocks.

Moreover, NVIDIA is expected to deliver impressive results. Wall Street experts predict revenue will reach $41.3 billion, a 57% increase from last year, with a third-quarter forecast of $53.4 billion. Net profit in April–June should rise to $24.7 billion compared to $16.6 billion for the same period in 2024.

Technically, on the daily chart, the S&P 500 has moved closer to a new all-time high. Long positions entered from 6393 and 6407 should be held and increased if the broad stock index renews its local high at 6480. Targets are at 6565 and 6700.