Wall Street lifted as data, corporate earnings show consumer strength
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 (.DJI), opens new tab rose 202.04 points, or 0.46%, to 44,457.00, the S&P 500 (.SPX), opens new tab increased 28.94 points, or 0.46%, to 6,292.72, and the Nasdaq Composite (.IXIC), opens new tab gained 153.86 points, or 0.74%, to 20,884.35.
Accompanying strong retail sales was upbeat commentary from consumer-facing American companies.
PepsiCo (PEP.O), opens new tab 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 (UAL.O), opens new tab 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 (DAL.N), opens new tab and American Airlines (AAL.O), opens new tab 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 (.SPLRCT), opens new tab 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 (2330.TW), opens new tab, 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 (MRVL.O), opens new tab rose 2.1% and Nvidia (NVDA.O), opens new tab added 1.1%.
Wall Street also watched Netflix (NFLX.O), opens new tab 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.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
The Guardian
20 minutes ago
- The Guardian
Trump fossil-fuel push setting back green progress decades, critics warn
Ever since Donald Trump began his second presidency, he has used an 'invented' national energy emergency to help justify expanding oil, gas and coal while slashing green energy – despite years of scientific evidence that burning fossil fuels has contributed significantly to climate change, say scholars and watchdogs. It's an agenda that in only its first six months, has put back environmental progress by decades, they say. Trump's skewed and unscientific energy priorities have come even as climate-change related weather disasters from huge floods in Texas to giant California fires have increased, and as Trump regulators are clamping down on spending for alternative fuels and weather research. As the death toll from the Texas floods rose to over 100 on 7 July, Trump signed an executive order that added new treasury department restrictions on tax subsidies for wind and solar projects. That order came days after Trump signed his One Big Beautiful Bill Act, which included provisions to gut big tax credits for green energy contained in the 2022 Inflation Reduction Act legislation Congress passed during Joe Biden's presidency In another oddly timed move, underscoring the administration's war on science, its proposed budget for the coming fiscal year would shutter 10 labs that the National Oceanic and Atmospheric Administration runs – specifically ones that conduct key research on ways weather changes are affected by a warming earth. Trump also signed four executive orders in April to help revive the beleaguered and polluting coal industry, which he and key cabinet members touted more at Carnegie Mellon University in Pittsburgh as they promoted plans by private companies to spend $92bn on AI projects and expand coal and natural gas in Pennsylvania. The blinkered focus that Trump and his key regulators place on their energy policies reflect the administration's denigration of science, while posing dangers to public health and scientific progress. And, critics say, this is all happening as university research and government labs face big cutbacks in funding and staff. Trump has pushed for more fossil-fuel production, rhapsodized about 'beautiful coal', dubbed climate change a 'hoax' and invoked his 'drill, baby, drill' mantra to promote more oil and gas projects after receiving $75m in campaign donations in 2024 from fossil-fuel interests. Scholars have hit out at the administration for firing hundreds of scientists and experts working on a major federal report detailing how climate change is impacting the country. The administration has also systematically deleted mentions of climate change from federal websites while cutting back funds for global warming research. 'Trump's actions are a patent attempt to roll back decades of environmental progress, not because it makes any sense, economically, but because it does two things that Trump wants,' Naomi Oreskes, a Harvard historian of science, told the Guardian 'First, it helps his cronies in the oil, gas and coal industries, who we know he met with a Mar-a-Lago before the election, and who gave substantial sums to his election campaign.' Oreskes said it's also 'part of a larger attempt to deny the credibility of environmental protection, tout court'. 'Look at Trump trying to force uneconomic coal fired power plants to stay open,' she continued. 'That makes no economic sense, and defies the principles of free market economics that Republicans claim to support. But like the guys who jack up their trucks to make more pollution, Trump is trying to deny the necessity and credibility of environmental concerns.' Oreskes stressed that much of the science Trump 'is in the process of destroying forms the basis for environmental and public health protection in this country: the National Oceanic and Atmospheric Administration, the US Geological Survey and the EPA, plus all the federally funded science at universities across the country, including my home institution, Harvard. None of this makes economic sense.' Many scientists echo Oreskes's concerns as do Democratic attorneys general, who filed a lawsuit in May challenging the legality of the Trump administration's declaration of a national 'energy emergency' to justify its radical policies. Meanwhile, regulatory and spending shifts at the Environmental Protection Agency, including staff and research cuts, have revealed the administration's disregard for scientific evidence – particularly about climate change and its adverse economic effects. In response to the cuts and policy shifts, a total of 278 EPA employees signed a letter in July denouncing the agency's politicization and decrying policies that 'undermine the EPA mission of protecting human health and the environment'. The EPA then put 144 of the employees who signed their names to the letter on leave for two weeks while an 'administrative investigation' was conducted. 'This isn't quite at the level of the 17th-century church's persecution of Galileo for saying the Earth goes around the Sun, but it's in a similar spirit of ideology trying to squelch science,' Michael Gerrard, who heads the Sabin Center for Climate Change Law at Columbia University, told the Guardian. 'Trump's use of an invented 'energy emergency' to justify more fossil-fuel production defies not only physics but arithmetic. The numbers show that the US is producing more oil and gas than any other country, and that Trump's actions in knifing the wind and solar industries will raise the energy prices paid by US consumers.' Gerrard stressed too that, on the Texas flooding, 'the lack of sufficient warnings highlight how short-sighted are Trump's drastic cuts to the National Weather Service and other federal scientific work'. He added it was 'especially so since climate change is intensifying extreme weather events, and Trump's attacks on green energy and support of fossil fuels will make those worse'. Such criticism has not seemed to faze Trump or top agency appointees like EPA administrator Lee Zeldin. Last month, 1,500 staffers who work in EPA's office of research and development (ORD) were told in a staff meeting that they would have to apply for about 400 new posts in other EPA offices. What will happen to employees who don't land new positions is unclear. 'Gutting the … [ORD] is a loss for health,' warned Laura Kate Bender, assistant vice-president of nationwide healthy air at the American Lung Association. Further experts and watchdogs have stressed that the health of millions of Americans was threatened by Zeldin's May announcement of plans to cut its budget by $300m in fiscal year 2026 – a move that's part of a makeover to reduce spending levels to those of the 1980s under Ronald Reagan. In response to the cuts and policy shifts, 278 EPA employees signed a letter in July denouncing the agency's politicization and decrying policies that 'undermine the EPA mission of protecting human health and the environment'. The EPA then put 144 of the employees who signed their names to the letter on leave for two weeks while an 'administrative investigation' was conducted. On Friday, the EPA doubled down on the cuts and say it would be reducing its entire workforce by at least 23% through voluntary retirements and layoffs. Gerrard noted that the administration's misguided energy moves and rejection of science are having enormous societal costs: 'Laboratories are being shut down around the country, experiments that might be on the cusp of great discoveries are being halted, and young aspiring scientists are rethinking their career paths. Other countries are recruiting US scientists and offering them friendlier environments.' Looking ahead, Oreskes, too, warns that the Trump administration's denigration of science will do long term damage to public health, the environment and scientific progress 'The scientific agencies that Trump is destroying, such as the National Weather Service, save the American people and American business billions of dollars in avoided property damage and health costs,' she said. 'But if you want to deny the true costs of climate change, then you may be motivated to destroy the agency that documents these costs [Noaa]. And if you want to deny the need for environmental and public health protection, then an effective way to do that is to destroy the scientific agencies and academic research that for decades have proven that need.'
Telegraph
20 minutes ago
- Telegraph
Trump has every right to berate the technocrats
Knucklehead or numbskull? Donald Trump uses both terms to describe Jerome Powell, the chairman of the US Federal Reserve. It depends on which day of the week it is. His attacks on Powell are now so frequent they have lost the power to shock, but imagine the horror if Sir Keir Starmer started regularly describing Andrew Bailey, the Governor of the Bank of England, as a nitwit or a simpleton. Or if France's president, Emmanuel Macron, were to refer to Christine Lagarde, the president of the European Central Bank, as a 'nigaud' or 'crétin'. Imagine also if they let it be known that they were examining ways of ridding themselves of their troublesome monetary priests, as Trump has done in the US. The entire political and economic establishment would be up in arms and there would be mayhem in the bond markets. Yet Trump is Trump and iconoclasm comes with the territory. Trump's bark may in practice turn out to be worse than his bite. It often does. It is none the less worth considering whether in this instance he might not have a point. Looked at objectively, the unwritten understanding that presiding governments should never criticise their central banks is one of the modern world's more absurd conventions. Of course, we all know how it came about. It was part of a much wider shift in which key parts of government were removed from direct political control and vested instead with independent technocrats. Free from the need to win elections, it was argued, these arms-length bodies would do a much better job than the politicians in keeping things on the straight and narrow. In Britain, granting the Bank of England independent control of monetary policy, was very much part of the then-Labour government's attempt to sanitise itself with markets and present the UK as a trusted and stable monetary regime that had finally put its post-war inflationary past behind it. As with most other central banks, independence has been buttressed by provisions that make it virtually impossible to sack the incumbent governor except in the case of madness or misfeasance. Much as he would like to dismiss Powell, even Trump has struggled to find a way around these guardrails. The ballooning costs of renovating the Federal Reserve's grandiose Washington headquarters may be evidence of public sector waste and incompetence but it is not, on the face of it, a case of outright fraud. All the same, the lavish nature of the Fed's refurbishment touches a chord that characterises central banks as out of control, unaccountable and often just plain wrong. And now they build themselves palaces and cathedrals as symbols of the once-ruling idolatry. Admittedly, Trump's own vulgar redecoration of the Oval Office in his trademark gold chintz is in some respects just as bad, even if far less expensive. But at least Trump is elected, while Powell is a mere appointee. This in itself is causing much amusement, for in this week describing Powell as a 'terrible' chairman, Trump added that he was 'surprised he was appointed', seeming to forget that it was he who originally chose him. He soon regretted it and, by the end of Trump's first presidency, the two were barely on speaking terms.
Reuters
20 minutes ago
- Reuters
South Korea national security adviser travels to Washington ahead of tariff deadline
SEOUL, July 20 (Reuters) - South Korea's national security adviser has headed to Washington, authorities said on Sunday, with less than two weeks to go until U.S. President Donald Trump's Aug. 1 deadline to secure a trade deal or face steep tariffs. Wi Sung-lac's trip comes just two weeks after his last visit to Washington for talks on tariffs and security. After Trump's announcement, South Korea said it planned to intensify trade talks. There were no immediate details on who he was planning to meet. Presidential aide Woo Sang-ho told journalists Wi would engage in negotiations on various issues, without elaborating. Earlier this month, Trump said he planned to impose a 25% tariff on South Korea from August 1, posing the first major test for South Korea's President Lee Jae Myung since he came to office barely a month ago. On his last trip to Washington, Wi said he had met U.S. Secretary of State Marco Rubio and proposed including security and investments in trade negotiations. Wi also proposed an early summit between the leaders of the two countries, according to media reports.
