The S&P 500 Index and Nasdaq Composite closed at new record highs Tuesday as investors reacted to testimony from Federal Reserve Chair Jerome Powell regarding the potential risks of holding interest rates at too high levels for too long. The broader market index rose above the flatline to settle at 5,576.98, while the Nasdaq advanced 0.14% to cloe at 18,429.29. The Dow Jones Industrial Average, meanwhile, slipped lower, falling over 50 points.

Here's how the market settled on Tuesday:

S&P 500 Index (SPY  ): +0.07% or +4.13 points to 5,576.98

Dow Jones Industrial Average (DIA  ): -0.13% or -52.82 points to 39,291.97

Nasdaq Composite Index (QQQ  ): +0.14% or +25.55 points to 18,429.29

In Focus:

Powell said Tuesday that the U.S. economy is "no longer an overheated economy," and it is demonstrating the strongest growth of any developed nation in testimony before the Senate Banking Committee.

Powell also expressed that holding interests rates at high levels for too long could harm further growth. The Fed's current rate has been held in a range of 5.25% to 5.50% for the past few policy cycles after the central bank issued 11 consecutive hikes.

"In light of the progress made both in lowering inflation and in cooling the labor market over the past two years, elevated inflation is not the only risk we face," Powell said in prepared remarks. "Reducing policy restraint too late or too little could unduly weaken economy activity and employment."

Market participants are currently pricing in two rate cuts this year starting in September, according to CME Group's FedWatch Tool. However, policymakers signaled in the minutes from their June meeting that only one rate cut is coming this year.

In the News:

Boeing (BA  ) said it delivered more commercial jets last month than any other month so far this year on Tuesday, but posted a 27% annual decline. With the delivery of 44 planes in June, Boeing has delivered 175 planes in the first half of the year, falling behind competitor Airbus (EADSY  ), who has delivered 323 planes year-to-date. The aerospace manufacturer has been facing legal scrutiny recently, and agreed to plead guilty to a criminal fraud conspiracy charge related to two fatal 737 MAX airline crashes in 2018 and 2019 on Sunday.

BP (BP  ) shares came under pressure after the oil and gas company warned investors of a post-tax impairment charge in the range of $1 billion to $2 billion, which includes costs related to BP's ongoing review of a refinery in Gelsenkirchen, Germany. The company also cautioned that it expects weaker refining margins in its second quarter, which will have a negative impact of between $500 million and $700 million.

For Wednesday:

Market participants will tune in to Powell's testimony before the House Financial Services Committee as they look ahead towards Thursday's consumer price index reading and Friday's producer price index reading for June for more insights on inflation at the start of the summer season.