US benchmark equity indexes experienced notable gains during intraday trading, as investors closely monitored the latest economic data and corporate earnings reports, particularly those from Nvidia. The Dow Jones Industrial Average saw an increase of 1.1%, reaching 41,521.8, while the Nasdaq Composite climbed by 1% to hit 17,726.
The S&P 500 advanced by 0.8%, closing at 5,635.5. Sector performance was varied, with industrials and energy leading the charge upward, in contrast to consumer staples and real estate, which faced losses. In the realm of economic indicators, the latest report from the Bureau of Economic Analysis revealed that US real gross domestic product (GDP) grew at an annualized rate of 3% in the second quarter, surpassing the initial projection of 2.8%.
This positive revision aligns with the consensus expectations outlined by Bloomberg, which also anticipated a 2.8% reading. Market analysts have expressed an optimistic yet cautious outlook, with insights from TD highlighting that the economy may be positioned in what they term a 'Goldilocks scenario.' This scenario suggests that growth is likely to taper off gradually through the latter half of the year, facilitating a decline in inflation toward the Federal Reserve's target of 2%.
Consequently, this environment might allow the Federal Open Market Committee to consider reducing its benchmark lending rate by at least 75 basis points before the year concludes, as indicated in their recent client communication. Government data showed a decrease in weekly applications for unemployment insurance in the US, reinforcing the notion put forth by Oxford Economics that layoffs remain at historically low levels.
Despite the Fed’s commitment to a rate cut in September to safeguard against potential labor market weaknesses, the brokerage firm advised that current claims data does not substantiate a reduction beyond 25 basis points. In terms of market yields, the US two-year yield experienced an increase of 3.1 basis points, reaching 3.9% intraday.
Simultaneously, the 10-year rate saw a rise of 2.8 basis points, landing at 3.87%. Turning to company-specific news, Nvidia reported its fiscal second-quarter results, showcasing financial performance that exceeded Wall Street's expectations late Wednesday. Robust demand for generative artificial intelligence significantly contributed to the record revenue achieved by the company.
However, Nvidia’s shares saw a decline of 3.9% during intraday trading on Thursday. This downturn in stock price was exacerbated by the aforementioned 'frothy expectations' surrounding the nature of future guidance, as described by UBS Securities in a note to clients. In contrast, Best Buy enjoyed a remarkable surge, with its shares soaring by 15%, marking the highest gain on the S&P 500.
This upswing followed the electronics retailer’s decision to raise its full-year earnings outlook based on stronger-than-anticipated results from the fiscal second quarter. The company reported gains specifically within its domestic tablet and computing segments. Meanwhile, Cooper reported a substantial 12% increase in its stock, becoming the second-best performer on the S&P 500 after revealing better-than-expected fiscal third-quarter results late Wednesday. However, not all companies fared well.
Dollar General experienced a significant decline, with shares plummeting nearly 30%, making it the worst performer on the S&P 500. This significant drop followed the retailer's announcement to lower its full-year outlook amidst declining sales trends, as its fiscal second-quarter results fell short of analysts' expectations. Other noteworthy firms such as Dell Technologies, Marvell Technology, Autodesk, Lululemon Athletica, Ulta Beauty, and MongoDB are scheduled to disclose their results after the closing bell on Thursday, which is anticipated to stir further market reactions. Amidst these market developments, West Texas Intermediate crude oil prices increased by 1.8%, settling at $75.96 a barrel.
The precious metals market also saw positive movement, with gold rising 0.9% to $2,561 per troy ounce and silver increasing by 1.3% to reach $29.57 per ounce..