U.S. stocks closed higher on Thursday, with the S&P 500 inching closer to a new record high as the ceasefire between Iran and Israel continued to hold, and a batch of economic data gave reasons enough for the Federal Reserve to go for a rate cut. All three major indexes ended in positive territory.
The Dow Jones Industrial Average (DJI) jumped 0.9%, or 404.41 points, to finish at 43,386.84 points.
The S&P 500 rose 0.8%, or 48.86 points, to end at 6,141.02 points and is just a few points away from hitting an all-time high. Communication services, consumer discretionary, materials, and industrials stocks were the biggest gainers.
The Consumer Discretionary Select Sector SPDR (XLY) gained 0.9%, while the Communication Services Select Sector SPDR (XLC) and Materials Select Sector SPDR (XLB) added 1.2% and 1.1%, respectively. The Industrials Select Sector SPDR (XLI) added 1%. The Energy Select Sector SPDR (XLE) jumped 1.4%. Nine of the 11 sectors of the benchmark index ended in positive territory.
The tech-heavy Nasdaq climbed 1%, or 194.36 points, to close at 20,167.91 points.
The fear-gauge CBOE Volatility Index (VIX) was down 1.01% to 16.59. Advancers outnumbered decliners on the NYSE by a 4.76-to-1 ratio. On Nasdaq, a 2.3-to-1 ratio favored advancing issues. A total of 16.22 billion shares were traded on Thursday, lower than the last 20-session average of 18.10 billion.
Stocks rallied on Thursday after a batch of economic data raised hopes that the Federal Reserve could finally resume rate cuts in the coming weeks. The 90-day pause on liberation-day tariffs ends on July 8. However, White House spokesperson Karoline Leavitt downplayed the trade deal deadlines as, she said, “The deadline is not critical.”
It was also unlikely that President Donald Trump would have implemented those hefty tariffs, which he paused after markets tumbled. Stocks have since made a solid rebound. On Thursday, the S&P 500 closed just a few points away from its all-time intraday high of 6,147.43 points hit in February.
The S&P 500 has had a remarkable turnaround, and is up 27% from its intraday low this year, after nearly entering the bear market, triggered by tariff fears in April. The index is now up 4% for the year after overcoming several challenges, including tariffs, inflationary pressures and geopolitical tensions.
The Nasdaq is also on track to hit a new record high. The Nasdaq rally has largely been driven by enthusiasm surrounding artificial intelligence (AI). On Thursday, NVIDIA Corporation (NVDA) shares rose another 0.5% after the AI darling’s stock hit an all-time high on Wednesday to regain its position as the world’s most valuable company.
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