Stocks Rise on Signs US Economy Is in Good Shape: Markets Wrap
(Bloomberg) — Wall Street traders lifted stocks as signs the world’s largest economy remains solid despite elevated inflation bolstered bets that Corporate America’s earnings will keep powering ahead.
Economically sensitive corners of the market outperformed, with the Dow Jones Industrial Average climbing toward a fresh record. A rebound in chipmakers also buoyed investor sentiment after Micron Technology Inc.’s blowout outlook lifted the shares by 13%. About 350 firms in the S&P 500 rose, but the index traded off session highs as Apple Inc. led losses in megacaps.
US consumer spending accelerated in May even as prices rose at the fastest pace in more than three years, suggesting Americans are powering through the fallout from the Iran war. A separate report showed the US economy grew at an annualized 2.1% pace in the first quarter, faster than previously estimated.
While those figures will likely leave the Federal Reserve under pressure to keep interest rates elevated, the recent pullback in energy costs could help ease inflationary pressures in the months ahead. Those bets drove short-term Treasury yields lower.
“The worst of inflation and consumer angst may be mostly behind us,” said Brian Jacobsen at Annex Wealth Management. “As long as gasoline prices trend lower, inflation expectations will likely follow suit.”
The latest economic data reinforced the view that consumers and the broader economy remain on solid footing, and while that may not soften the Fed’s stance, it helps ease fears of a “stagflationary slowdown,” according to Bret Kenwell at eToro.
“The impact of higher energy prices is probably short-lived,” said Scott Helfstein at Global X ETFs. “Inflation feels like a raw nerve after the past few years, but we are moving toward price stability. People are making more and spending more. That is nominal growth which will keep driving the economy.”
Inflation will likely start going lower now that oil prices have eased, so that may alleviate some of the pressure on the central bank, noted Chris Zaccarelli at Northlight Asset Management.
“But next month’s data needs to be lower than what we are seeing today if that is going to be the case,” he said.
Money markets showed a drop in wagers on a hike this year, pricing in about 33 basis points of tightening by the December policy meeting. The chance of a rate increase next month dwindled to about one-in-three.
Corporate Highlights:
Apple Inc. took the extreme measure of raising prices of all Macs, iPads, home devices and the Vision Pro on Thursday, seeking to offset cost hikes caused by an unprecedented shortage of memory chips and storage. Qualcomm Inc. jumped after the chipmaker forecast annual sales of more than $15 billion from artificial intelligence components in data centers by fiscal 2029. Jefferies Financial Group Inc. posted second-quarter earnings that missed analysts’ estimates as fees declined from a business overseen by its asset-management unit, which bet on the embattled auto-parts supplier First Brands Group. Darden Restaurants Inc. posted a cautious overall profit outlook as same-store sales at Olive Garden trailed expectations, raising questions about demand that overshadowed better-than-expected earnings Spices and seasonings maker McCormick & Co. reported second-quarter profit that beat estimates, buoyed by higher prices and a tariff refund, and reaffirmed its full-year guidance. Some of the main moves in markets:
Stocks
The S&P 500 rose 0.2% as of 11:38 a.m. New York time The Nasdaq 100 rose 0.5% The Dow Jones Industrial Average rose 0.8% The Stoxx Europe 600 rose 0.8% The MSCI World Index rose 0.4% Currencies
The Bloomberg Dollar Spot Index fell 0.3% The euro rose 0.2% to $1.1383 The British pound rose 0.3% to $1.3210 The Japanese yen was little changed at 161.67 per dollar Cryptocurrencies
Bitcoin fell 2.6% to $59,289.42 Ether fell 3.1% to $1,561.15 Bonds
The yield on 10-year Treasuries declined one basis point to 4.38% Germany’s 10-year yield was little changed at 2.86% Britain’s 10-year yield advanced two basis points to 4.70% The yield on 2-year Treasuries declined four basis points to 4.10% The yield on 30-year Treasuries advanced one basis point to 4.85% Commodities
West Texas Intermediate crude rose 1.4% to $71.34 a barrel Spot gold rose 0.7% to $4,028.31 an ounce ©2026 Bloomberg L.P.
