NEW YORK/LONDON :Equities advanced on Thursday with the S&P 500 and the Nasdaq registering record closing highs and the dollar rose as investors were encouraged by the latest crop of economic data and earnings reports while oil futures rose on supply risks in the Middle East.
Data on jobless claims showed that the number of Americans filing new applications for unemployment benefits fell last week, pointing to steady job growth so far in July, though some laid off workers are experiencing long spells of unemployment because of a moderation in hiring.
U.S. retail sales rebounded more than expected in June, but some of the increase likely reflected higher prices for some goods exposed to tariffs.
“In economic data two key releases came out today: retail sales and jobless claims. Both were better than anticipated,” said Mike Cornacchioli, investment strategy director and senior vice president at Citizens Private Wealth.
“Those two illustrate the strength of the consumer and the labor market. So, a lot of the fears that were placed on the state of the U.S. economy are overblown and have failed to come to fruition at this point in time. Maybe they will some time down the line, but this data and the data that’s come in lately has just reinforced the strength of the U.S. economy.”
Cornacchioli also pointed to strong earnings reports as a boost for equities on Thursday.
Taiwan Semiconductor Manufacturing, the world’s main maker of advanced AI chips, posted record profits ahead of expectations. It warned that future income might be hit by U.S. tariffs, though perhaps not until the fourth quarter. Also, GE Aerospace lifted its profit outlook with jet engine deliveries rising as efforts to fix supply constraints showed results.
“Money continues to flow into equities on expectations for a strong earnings season,” said Michael James, equity sales trader at Rosenblatt Securities, Los Angeles.
“Overall the market continues to climb a wall of worry regardless of elevated valuations as people are looking forward beyond this current quarter or the next month to value stocks on 2026 multiples.”
After four straight days of losses, Europe’s STOXX 600 index ended up 0.96 per cent, with a boost from strong earnings reports including record orders at Swiss engineering firm ABB.
Wall Street was boosted by stocks including PepsiCo PEP.O which rallied 7.5 per cent after reporting better-than-expected quarterly results on steady demand in the U.S. and major markets, including Europe. In another positive sign for the consumer, United Airlines UAL.O shares rose after executives said the company has seen strong bookings in the past three weeks.
The S&P 500 rose 33.66 points, or 0.54 per cent, to 6,297.36 for a record closing high while the Nasdaq Composite rose 153.78 points, or 0.74 per cent, to 20,884.27, also a closing record.
The Dow Jones Industrial Average rose 229.71 points, or 0.52 per cent, to 44,484.49, still below its record closing level. With the Russell 2000 small cap index rising 1.2 per cent on the day, Rosenblatt’s James noted “a healthy rotation into the small cap stocks to provide a little broader participation with the market strength today.”
MSCI’s gauge of stocks across the globe rose 5.18 points, or 0.56 per cent, to 926.2, putting it within striking distance of its record levels.
Thursday’s market gains follow a dramatic wobble during the prior session when Trump said he was highly unlikely to fire Federal Reserve chair Jerome Powell. However, he left the door open to the possibility of ousting him and renewed his criticism of the central bank chief for not cutting U.S. interest rates.
In currencies, the dollar rose on Thursday after the economic data. While it pulled back from its highs of the day, the dollar index, which measures the greenback against a basket of currencies including the yen and the euro, was last up 0.32 per cent at 98.66. The euro was down 0.34 per cent at $1.1594.
Against the Japanese yen, the dollar strengthened by 0.5 per cent to 148.6 as polls showed Prime Minister Shigeru Ishiba’s coalition was in danger of losing its majority in the upper house in upcoming elections in Japan.
U.S. Treasury yields were higher in a relatively choppy session. Yields had briefly spiked higher and then fallen following the sales and jobless claims data, which showed the world’s largest economy on a stable footing and supported the Fed’s patient stance on monetary easing.
The yield on benchmark U.S. 10-year notes rose 0.2 basis points to 4.457 per cent, from 4.455 per cent late on Wednesday while the 30-year bond yield was roughly flat at 5.0135 per cent versus 5.015 per cent in the prior session.
The 2-year note yield, which typically moves in step with interest rate expectations for the Federal Reserve, rose 2.4 basis points to 3.909 per cent, from 3.885 per cent late on Wednesday.
Oil prices settled $1 higher after drones struck Iraqi Kurdistan oil fields for a fourth day, pointing to continued risk in the volatile region.
U.S. crude settled up 1.75 per cent, or $1.16 at $67.54 per barrel and Brent settled at $69.52 a barrel, up 1.46 per cent, or $1.00.
Gold prices were lower after the upbeat U.S. economic data aided the Fed’s cautious stance on rate cuts.
Spot gold fell 0.22 per cent to $3,338.89 an ounce. U.S. gold futures fell 0.35 per cent to $3,340.80 an ounce.
