U.S. equities nudged higher on Thursday, supported by upbeat retail sales data and a wave of corporate earnings.
As of 9:35 a.m. ET, the Dow Jones Industrial Average was up 100 points, or 0.2%, while the S&P 500 rose 4 points (0.1%) and the NASDAQ Composite gained 20 points (0.1%).
Netflix Earnings Ahead
Investor sentiment remained cautiously optimistic ahead of Netflix’s (NASDAQ: NFLX) second-quarter earnings, due after the close. Analysts at Vital Knowledge expect strong results as the streaming giant continues to expand its market dominance. However, they cautioned that investor expectations may be running too high in the near term.
Corporate Earnings Highlights
A solid start to the earnings season has helped lift markets, with major U.S. banks largely exceeding expectations, even as they flagged concerns about the months ahead.
- PepsiCo (NASDAQ: PEP) rose after posting better-than-expected core earnings for Q2. Growth in its international segment helped offset a tough operating environment.
- GE Aerospace (NYSE: GE) shares climbed after reporting strong second-quarter results and raising its full-year outlook, citing improved operational efficiency and strong demand in its commercial services division.
- United Airlines (NASDAQ: UAL) fell after warning of lower earnings next quarter due to operational issues at Newark Airport, a key hub.
- Lucid Group (NASDAQ: LCID) soared 35% on news of a partnership with Uber (NYSE: UBER) and Nuro to develop next-gen autonomous robotaxis.
- Taiwan Semiconductor Manufacturing (NYSE: TSM) also impressed, reporting record Q2 profits on surging AI-driven chip demand.
Trump Comments Stir Fed Speculation
Markets experienced volatility Wednesday following rumors that former President Donald Trump planned to fire Federal Reserve Chair Jerome Powell. Trump later denied those plans but said he would “love” for Powell to resign. Powell, appointed by Trump in 2017, has stated he intends to complete his term, which runs through May 2026.
The Fed Chair has often been a target of Trump’s criticism, particularly for not aggressively cutting rates amid trade tensions. Powell has maintained a cautious policy approach, balancing uncertainty from tariffs and inflationary risks.
Retail Sales Surprise to the Upside
June retail sales rose 0.6% month-over-month, reversing a 0.9% decline in May and outperforming economists’ expectations of a modest 0.1% gain, according to the U.S. Commerce Department. The data, which mostly reflects goods purchases and is not adjusted for inflation, signals resilient consumer demand.
Additional economic indicators on Thursday also pointed to moderate strength:
- The Philadelphia Fed Manufacturing Index returned to positive territory.
- Weekly jobless claims dipped slightly to 221,000, suggesting a stable labor market.
While the Fed signaled two potential rate cuts in its June meeting, New York Fed President John Williams on Wednesday said it was too early to act, citing inflation risks and trade uncertainty.
Trade Developments: India Deal Nears
On the international front, Trump said a trade agreement with India is nearing completion, following a pact signed with Indonesia earlier in the week. Talks with the European Union continue amid tensions over a proposed 30% tariff. The EU has criticized the measure and warned of retaliation, while Trump has maintained an August 1 deadline.
Oil Prices Stabilize
Crude oil prices steadied after three days of declines, supported by robust economic data from major consumers.
At 9:35 a.m. ET:
- Brent crude was down 0.1% at $68.57 per barrel.
- West Texas Intermediate (WTI) rose 0.4% to $66.61 per barrel.
Positive signals from China’s economic growth and a larger-than-expected U.S. inventory draw helped buoy prices. The Energy Information Administration reported a 3.9 million-barrel drop in U.S. crude inventories last week to 422.2 million barrels, indicating strong refinery demand and tightening supply
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