Indexes up: Dow 0.46%, S&P 500 0.46%, Nasdaq 0.74%
Chip stocks jump after TSMC’s record quarterly profit
PepsiCo expects smaller decline in annual core profit, shares up
June retail sales rise 0.6%
(Updates market prices to 2:15 p.m., adds details and comments)
By Pranav Kashyap and David French
July 17 (Reuters) – The Nasdaq Composite rose to a record high on Thursday, with Wall Street’s other major indexes also advancing, as strong economic data and positive earnings reports cheered investors.
U.S. retail sales bounced back sharply in June, signaling renewed economic momentum and confidence among consumers.
The data was the latest set in a week regarded as a proving ground for the staying power of strong market gains since April and a clue to the timing of potential interest rate cuts by the Federal Reserve.
Economic data has been somewhat mixed, with strong retail sales combined with stalled producer prices and a spike in consumer inflation in June, and a spike in consumer inflation in the same month. Investors believe the U.S. central bank will hold off on rate cuts as it weighs the inflationary impact of President Donald Trump’s import tariffs.
Traders now peg the odds of a September rate cut at just over 54%, with a July move nearly ruled out, according to CME’s FedWatch tool.
“The Fed is going to be more cautious and data-driven than what the market wants them to do,” said Jason Barsema, president of Halo Investing.
Fed Governor Adriana Kugler warned that rate cuts are on hold for now, as Trump’s tariffs begin to push up consumer prices and tight policy remains key to keeping inflation expectations in check.
U.S. Treasury yields also edged lower following the retail sales data.
At 2:15 p.m. ET, the Dow Jones Industrial Average rose 202.04 points, or 0.46%, to 44,457.00, the S&P 500 increased 28.94 points, or 0.46%, to 6,292.72, and the Nasdaq Composite gained 153.86 points, or 0.74%, to 20,884.35.
Accompanying strong retail sales was upbeat commentary from consumer-facing American companies.
PepsiCo forecast upbeat results, fueled by demand for energy drinks and healthier sodas, helping offset concerns about a dip in annual core profit. The company’s shares jumped 6.9%.
United Airlines gained 3.2% after the carrier projected stronger demand since early July, offering a rare bright spot for an industry strained by Trump’s budget cuts and trade tensions.
Rivals Delta and American Airlines also climbed over 1% each.
“Today is a day of somewhat justification of consumer health and earnings that continue to impress in a way that offer relief to markets,” said Keith Buchanan, senior portfolio manager at Globalt Investments.
Technology stocks were also buoyed, with the index on course for another record finish. Its 1% gain was the highest among the 11 S&P sectors.
U.S. chipmakers edged up after TSMC, the world’s main producer of advanced AI chips, posted a record quarterly profit, saying demand for artificial intelligence was getting stronger.
U.S.-listed shares of TSMC gained 3.7%, Marvell rose 2.1% and Nvidia added 1.1%.
Wall Street also watched Netflix ahead of its quarterly results after the market’s close. Its shares were up 1.6%.
On Wednesday, markets whipsawed after reports suggested Trump was mulling the ouster of Fed Chair Jerome Powell. Though Trump quickly shot down the reports, his persistent criticism of the Fed and hints at a possible ouster kept investors jittery.
Meanwhile, attention also remained on looming tariffs, with an August 1 deadline threatening higher levies for many U.S. trading partners. (Reporting by Pranav Kashyap and Nikhil Sharma in Bengaluru and David French in New York; Editing by Maju Samuel and David Gregorio)
