The S&P 500 closed at a new record high on Thursday, buoyed by stronger-than-expected retail sales and continued positive momentum in corporate earnings.
At the close of trading ,4:00 p.m. ET , the S&P 500 rose 0.6% to a record 6,300.42. The Dow Jones Industrial Average gained 230 points (0.6%), and the NASDAQ Composite advanced 0.7%.
Retail Sales Rebound in June
Retail sales rebounded sharply in June, rising 0.6% from the previous month after a 0.9% decline in May, according to the U.S. Commerce Department’s Census Bureau. Economists had expected a more modest 0.1% increase. The report, which primarily tracks goods and is not adjusted for inflation, added to signs of consumer resilience.
Other economic indicators also showed strength. The Philadelphia Fed Manufacturing Index returned to positive territory, suggesting an uptick in regional factory activity, while weekly jobless claims edged down to 221,000.
Rate Cut Expectations vs. Fed Caution
At its June meeting, the Federal Reserve projected two rate cuts by year-end, with markets largely expecting the first cut at the September FOMC meeting. However, New York Fed President John Williams pushed back on Wednesday, saying it’s too early to consider lowering rates given inflation risks and ongoing economic uncertainty, including the impact of tariffs.
Earnings Season in Focus: Netflix, GE, PepsiCo, More
Earnings reports continued to roll in on Thursday:
- Netflix (NASDAQ:NFLX) is set to report Q2 results after the bell. Analysts at Vital Knowledge expect strong numbers as the company maintains its lead in the streaming market, though they warn that investor expectations may be too high.
- PepsiCo (NASDAQ:PEP) shares rose after the company topped Q2 earnings estimates. Despite global headwinds, its international operations showed resilience.
- GE Aerospace (NYSE:GE) beat quarterly expectations and raised its full-year outlook, driven by strength in commercial services and better operational efficiency.
- United Airlines (NASDAQ:UAL) slipped after warning that Q3 earnings will be hit by flight disruptions at Newark Airport, one of its major hubs.
- Lucid Group (NASDAQ:LCID) soared 35% after announcing a partnership with Uber Technologies (NYSE:UBER) and Nuro to develop a next-generation autonomous robotaxi.
- Taiwan Semiconductor Manufacturing (NYSE:TSM) reported record Q2 profits, beating forecasts thanks to continued demand for AI-related chips.
- GSK plc (LON:GSK) fell over 3% after a U.S. FDA advisory panel voted against approval of its blood cancer treatment Blenrep, citing safety concerns.
Trump Denies Plans to Fire Fed Chair Powell
Markets were rattled midweek following rumors that former President Donald Trump intended to fire Fed Chair Jerome Powell, raising fears over central bank independence. Trump later denied those plans but added he would “love” to see Powell resign. Powell, appointed by Trump in 2017, has reiterated his intention to serve his term through May 2026. He has faced repeated criticism from Trump for not cutting interest rates faster, often amid uncertainty fueled by Trump’s own trade policies.
Trade Talks with India Nearing Completion
On the trade front, Trump said a deal with India is close, following a recent agreement with Indonesia. Negotiations with the European Union continue despite tensions over a proposed 30% tariff, which EU officials have condemned and threatened to counter. Trump has indicated he will not extend the August 1 deadline for a resolution.
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