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Wall Street surged in one of its strongest trading days of the year on Thursday, driven by encouraging economic data showing the U.S. economy is performing better than anticipated, largely thanks to robust consumer spending. The S&P 500 (SPX) leapt 1.6%, marking its fourth-best day of the year and extending its winning streak to six sessions. The index is now just 2.2% shy of its all-time high, recovering from a recent dip.
The Dow Jones Industrial Average (DJI) advanced 554 points, or 1.4%, while the Nasdaq Composite (IXIC) surged 2.3%, buoyed by recoveries in major tech stocks like Nvidia (NASDAQ:NVDA) and Tesla (NASDAQ:TSLA). The rally was spurred by data indicating U.S. retail sales for July surpassed expectations and a decline in initial jobless claims, suggesting a resilient economy despite earlier fears of a downturn.
In bond markets, Treasury yields rose following the positive economic reports, with the 10-year yield climbing to 3.91% and the two-year yield to 4.09%. This uplift in yields reflects market expectations of future interest rate cuts by the Federal Reserve. Traders now anticipate a quarter-point reduction at the Fed’s September meeting, rather than a more aggressive cut.
Major companies contributed to the upbeat mood. Walmart (NASDAQ:WMT) saw its shares soar 6.6% after reporting stronger-than-expected profits and raising its full-year sales forecast. Deere & Co. (NASDAQ:DE) and Cisco Systems (NASDAQ:CSCO) also exceeded profit forecasts, with their stocks rising 6.3% and 6.8%, respectively. Meanwhile, Ulta Beauty (NASDAQ:ULTA) surged 11.2% following news of a significant investment by Berkshire Hathaway (NASDAQ:BRK.A).
The Russell 2000 index of smaller stocks climbed 2.5%, reflecting increased investor confidence in the U.S. economy. International markets mirrored this optimism, with indexes rising in Asia and Europe, including Japan’s Nikkei 225 and the UK’s FTSE 100.
The positive data and market reactions suggest that while the economic growth concerns are not entirely over, the outlook is more promising than previously feared.
