The S&P 500 and Nasdaq reached fresh record highs on Thursday, powered by continued strength in chip stocks as optimism over AI-driven demand overshadowed concerns about escalating tariffs.
As of 2:07 p.m. ET, the Dow Jones Industrial Average rose 190 points (0.2%), while the S&P 500 gained 0.3% to close at a new high of 6,280.39. The Nasdaq Composite posted its second consecutive record close, finishing at 20,630.67.
Chip Stocks Continue to Surge
Semiconductor stocks jumped 1% on the day, with Taiwan Semiconductor Manufacturing (NYSE: TSM) leading the way after reporting a nearly 40% surge in Q2 sales—beating analyst expectations and highlighting sustained AI-driven demand.
Advanced Micro Devices (NASDAQ: AMD) rose following a rating upgrade to “buy” from HSBC, while NVIDIA (NASDAQ: NVDA) extended gains after surpassing a $4 trillion market value for the first time earlier this week.
Tariff Tensions Rise Over Brazil Dispute
Former President Donald Trump escalated trade tensions on Wednesday by releasing additional letters detailing new tariffs, including a proposed 50% tariff on all imports from Brazil, set to take effect August 1. The move is widely seen as a reaction to the treatment of former Brazilian President Jair Bolsonaro, a Trump ally.
Brazilian President Luiz Inácio Lula da Silva condemned the decision and pledged a proportional response, raising concerns of a possible trade war between the two nations.
Separately, Trump also reaffirmed a 50% tariff on copper imports, effective the same date, following through on earlier threats.
Economic Data Points to Strong Labor Market
Weekly jobless claims came in at 227,000, below the forecasted 236,000, suggesting continued resilience in the labor market.
Minutes from the Federal Reserve’s June meeting showed only a few policymakers favoring a near-term rate cut. Most officials preferred to hold steady, citing inflation risks tied to tariffs and their potential drag on economic growth. Trump, however, has reiterated his call for lower rates, warning of possible economic consequences if the Fed doesn’t act.
Corporate Movers: Kellogg, McDonald’s, Delta Air Lines
In corporate news:
- WK Kellogg (NYSE: KLG) surged after Italy’s Ferrero Group agreed to acquire the cereal maker for $3.1 billion (or $23 per share).
- McDonald’s (NYSE: MCD) gained over 2% after Goldman Sachs upgraded the stock to “buy,” citing expected demand growth from budget-conscious consumers.
- Delta Air Lines (NYSE: DAL) jumped after reinstating its full-year guidance, citing record June-quarter revenue and renewed business confidence, despite potential tariff-related consumer headwinds.
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