S&P 500, Nasdaq end at record highs as data, earnings point to consumer strength

The S&P 500 SPX stock index and the Nasdaq Composite IXIC both closed at record highs on Thursday, as investors embraced strong economic data and earnings reports that showed American consumers remained willing to spend.

The Nasdaq has ended at a record high in six of the previous seven sessions, and the S&P 500 has had six best finishes since June 27.

According to preliminary data, the S&P 500 SPX gained 35.32 points, or 0.56%, to end at 6,299.02 points, while the Nasdaq Composite IXIC gained 157.25 points, or 0.76%, to 20,887.74. The Dow Jones Industrial Average DJI rose 247.64 points, or 0.56%, to 44,502.42.

Wall Street has had a strong run since tumbling after President Donald Trump's Liberation Day tariff announcements in early April and then recovering. This week was seen as a proving ground for these gains though, with a number of key economic reports and the start of second-quarter earnings season.

Economic data and corporate earnings reports "are showing that the economic backdrop is still pretty solid, and so markets have been able to grind higher this week with some data to support where we are going," said Anthony Saglimbene, chief market strategist at Ameriprise Financial.

U.S. retail sales bounced back sharply in June, data showed on Thursday. Investors saw renewed economic momentum and confidence among consumers, after mixed inflation data which showed stalled producer prices and a spike in consumer inflation in the same month.

Investors have been watching for signs of whether Trump's tariff policies are starting to permeate the U.S. economy. The Federal Reserve has indicated it will hold off on interest rate cuts until it can see the inflationary impact of higher import taxes.

This was reiterated on Thursday by Fed Governor Adriana Kugler, who said rate cuts are on hold for now, as Trump's tariffs begin to push up consumer prices.

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.

Accompanying strong retail sales was upbeat commentary from consumer-facing American companies.

PepsiCo .O> jumped after forecasting upbeat results, fueled by demand for energy drinks and healthier sodas, helping offset concerns about a dip in annual core profit.

United Airlines UAL gained 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 DAL and American Airlines AAL also climbed.

Technology stocks were also buoyed, in particular U.S. chipmakers, after TSMC 2330, 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 2330 gained, as did Marvell MRVL and Nvidia NVDA.

Ameriprise's Saglimbene said the blowout TSMC earnings bode well for chipmakers and the wider technology sector.

"Before we get all the Big Tech earnings in the next week or two, you're seeing the single source of production of those (AI) chips saying their demand is very strong. So the set-up for Big Tech is pretty positive, which is why technology is leading on the day today," he added.