US stocks held steady near all-time highs on Wednesday after Federal Reserve Chair Jerome Powell's remarks to the Senate and House boosted hopes of an interest rate cut. The S&P 500 rose approximately 0.5% in mid-afternoon trading, while the Dow Jones Industrial Average jumped 0.4% and the Nasdaq Composite edged more than 0.6% higher.

Investors have been placing bets on rate cuts as signs of slowing in the US economy continue to accumulate. Both the S&P 500 and the Nasdaq Composite achieved six consecutive closing wins, setting new record highs. Powell's semiannual testimony to Congress hinted at the potential for lowering interest rates from their current two-decade highs. He pointed to a cooling in inflation and the job market, cautioning that keeping rates elevated for too long could weaken the economy.

Despite the positive sentiment in the market, a crucial test lies ahead with the release of the consumer inflation report scheduled for Thursday. A cooler reading in the report is expected to solidify the possibility of a Federal Reserve policy shift in September. However, if the report indicates a too-cool print, concerns about a recession and the labor market may resurface.

In corporate news, Taiwanese chipmaker TSMC experienced a surge in share price as its second-quarter sales grew at their fastest pace since 2022, fueled by the AI boom. On the other hand, tech giants Microsoft and Apple dropped plans to take observer board seats at OpenAI due to increasing antitrust scrutiny.

Meanwhile, CNN announced a reorganization plan that includes laying off around 100 workers. CNN CEO Mark Thompson highlighted the need for a greater focus on digital, outlining plans to launch a CNN.com subscription product by the end of the year. Warner Bros. Discovery, CNN's parent company, saw its shares fall about 2% following the announcement.

In the realm of economic arguments, Republicans have introduced a new case linking immigration, inflation, and the high cost of housing in their GOP platform ahead of the 2024 campaign. The argument suggests that an immigration crackdown, similar to the one led by Donald Trump in 2025, may help alleviate high prices, particularly regarding affordable housing. However, economists and Democrats remain skeptical, citing studies that suggest such proposals could actually cause inflation to spike anew.

Looking ahead, investors eagerly await Thursday's release of June's Consumer Price Index (CPI), a crucial data point that will shape future Federal Reserve interest rate policy. The report is expected to show a deceleration in headline inflation from May, with a smaller annual rise of 3.1%. The core CPI, which excludes food and gas prices, is anticipated to have risen 3.4% over the previous year and 0.2% over the prior month.

Powell's second day of testimony before the House Financial Services Committee reiterated his data-dependent approach to interest rate decisions. While Powell acknowledged evidence of cooler inflation, he emphasized the need for "good data" to be confident in the inflation's movement toward the Fed's 2% target.

With rate-cut hopes still intact, US stocks held near record levels, showcasing investors' optimism following Powell's testimony. Market participants will closely monitor further updates on the Fed's policy stance and the impact of the upcoming inflation report on future interest rate decisions.