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(Reuters) – U.S. stock index futures rose on Tuesday, with megacap technology and semiconductor stocks set to prolong Monday’s rally as investors waited to hear testimony from Federal Reserve chair Jerome Powell for clues on the monetary policy path.

The S&P 500 and the Nasdaq inched upwards to close at record highs on Monday, lifted by the rally in chip stocks as the Philadelphia semiconductor index rose to a more than two-week high.

That marked the 35th time this year the benchmark index has set a fresh closing record, as sharp gains in AI-linked stocks and technology shares have kept equity sentiment bright, offsetting the uncertainty around the central bank’s rate-cut plans.

Intel shares leapt 3.8% in premarket trading on Tuesday after gaining over 6% in the previous session, while AI-chip favorite Nvidia rose 1.1% and Marvell Technology was up 1.0%.

Investors will scrutinize Powell’s Congressional testimony later in the day to gauge how the central bank is assessing recent economic data that points to a slowdown in the labor market, amid other signs of potential economic weakness. The testimony, followed by questions from lawmakers, is scheduled to start at 10 a.m. ET.

“We expect Mr. Powell’s comments in the Q&A to be either balanced or slightly dovish, given the resumption in progress on disinflation and signs that economic activity and employment are slowing, albeit gradually,” analysts at Unicredit said in a note.

Policymakers’ own projections show an expectation of just one rate cut this year, but markets have stuck to pricing in 50 basis points of easing, seeing a nearly 74% chance for a 25 bps cut at the Fed’s September meeting, according to CME’s FedWatch.

Those bets have risen from under 50% a month ago.

Rate-sensitive megacap stocks Microsoft, Amazon.com, Alphabet and Meta Platforms were up between 0.3% and 0.5%.

“The market is continuing on a bull run and, with the prospects of rate cuts, I believe may continue for a while,” said WisdomTree senior economist Jeremy Siegel.

Crucial inflation data is also due this week. Thursday’s consumer price index and Friday’s release of the producer price index will provide insight into whether inflationary pressures in the world’s largest economy are easing.

Investors are also looking ahead to the start of the second-quarter corporate earnings season this week. Analysts, on average, see S&P 500 companies increasing their aggregate earnings per share by 10.1% in the second quarter, up from an 8.2% increase in the first quarter, according to LSEG I/B/E/S data.

At 5:53 a.m. ET, Dow e-minis were up 47 points, or 0.12%, S&P 500 e-minis were up 13.75 points, or 0.24%, and Nasdaq 100 e-minis were up 83.25 points, or 0.40%.

Among single movers, shares of Tempus AI rose 3.9% after J.P.Morgan initiated coverage of the stock with an overweight rating.

Shares of Eli Lilly gained 0.7% after a data analysis report published on Monday showed its treatment Mounjaro leads to faster and greater weight loss than Novo Nordisk’s obesity drug, Wegovy.

(Reporting by Lisa Mattackal in Bengaluru; Editing by Pooja Desai)

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