The tech-heavy Nasdaq climbed to a record high on Monday, boosted by chipmakers, with highly awaited quarterly results from Nvidia and the Federal Reserve's policy meeting minutes this week likely to test Wall Street's record-breaking run.
Upbeat corporate earnings and softer-than-expected inflation data have supported hopes for interest rate cuts this year, helping the three major U.S. indexes mark their fourth straight week of gains on Friday.
The benchmark S&P 500 and the tech-heavy Nasdaq both touched all-time highs last week, with the blue-chip Dow closing above the 40,000 level on Friday.
Investors are awaiting quarterly results from Nvidia on Wednesday for evidence that the AI chip leader can maintain its explosive growth and stay ahead of rivals. Minutes of the Fed's latest monetary policy meeting are also scheduled for the same day.
"This week, the question of whether we've gone too far, too fast with this market move will be on the table," said Sam Stovall, chief investment strategist at CFRA Research.
"If it (Nvidia results) continues to beat (markets expectations), but by lesser amounts, the stock's advance will slow... but people will not be selling out anytime soon. We're just at the beginning of an AI driven boom that will lift not just Nvidia but many other stocks."
Nvidia shares jumped 2.8%, with at least three brokerages raising the stock's price target, while Micron Technology climbed 4% after Morgan Stanley upgraded the memory chip maker to "equal-weight" from "underweight".
That helped information technology outperform the major S&P 500 sector indexes.
With few clues so far from Fed officials on the timing for rate cuts this year, investors will parse remarks from rate-setters including Christopher Waller and Philip Jefferson during the day.
Atlanta Fed President Raphael Bostic said it will take a while for the U.S. central bank to be confident that inflation is on track for its 2% goal, while Vice Chair For Supervision Michael Barr said the year's inflation data has been "disappointing" so far.
Traders expect a 76.2% chance of an at least 25-basis-point rate cut in September, according to the CME's FedWatch Tool.
Deutsche Bank raised its year-end S&P 500 target to 5,500 from 5,100 points earlier, the highest among major brokerages, citing strength in corporate earnings. That implied a near 4% upside from the index's last close.
On the economic data front, weekly initial jobless claims, S&P global flash PMI readings and durable goods data are due through the week.
At 9:57 a.m. ET, the Dow Jones Industrial Average was down 2.21 points, or 0.01%, at 40,001.38, the S&P 500 was up 17.35 points, or 0.33%, at 5,320.62, and the Nasdaq Composite was up 107.79 points, or 0.65%, at 16,793.76.
Johnson Controls International rose 3% following a report that activist investor Elliott Investment Management had built a position worth over $1 billion in the building solutions provider.
Norwegian Cruise Line jumped 6% after lifting its annual profit forecast. Peer Carnival Corp gained 4%.
Advancing issues outnumbered decliners by a 1.25-to-1 ratio on the NYSE and by a 1.07-to-1 ratio on the Nasdaq.
The S&P index recorded 36 new 52-week highs, while the Nasdaq recorded 53 new highs and 48 new lows.
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