On a brisk Thursday, the U.S. stock market was on the verge of yet another milestone. Edging closer to unprecedented heights, the S&P 500 experienced an increase of 0.8%, ending up a mere 0.05% below its highest recorded closing count since February. Metaphorically touching the sky for a fleeting moment, the index central to numerous 401(k) portfolios momentarily surpassed this benchmark in the afternoon. This considerable rise was owed partly to apprehensions related to President Donald Trump’s tariff policies, which caused a downward spurt of nearly 20% during the spring.
In terms of notable market movements, the Dow Jones Industrial Average enjoyed an upswing of 404 points or 0.9%, while the Nasdaq composite registered a 1% increase. McCormick, a renowned purveyor of cookery spices, spearheaded the pace by recording a remarkable 5.3% leap due to favorable profits that exceeded expectations. This trend reinforced the company’s outlook for the full fiscal year, which also beat analysts’ forecasts, incorporating strategic plans to balance the expense incurred due to escalating tariffs.
Technological behemoths have powered the market’s growth in the long haul, leading the charge since the S&P 500’s low in April. The AI technology craze, epitomized by chip manufacturer Nvidia, contributed to the upward trajectory with a 0.5% gain. Another AI trailblazer, Super Micro Computer, saw a lucrative boost of 5.7%, resulting in a net increase of 55% since April 8.
On the flip side, Micron Technology, a firm specializing in computer memory and data storage, had a day of fluctuating fortunes after it reported stronger profit and revenue for the quarter than anticipated. Despite highlighting increased demand for AI-driven memory, the stock ended the day with a 1% downturn.
The close of the day saw the S&P 500, the Dow Jones Industrial Average, and the Nasdaq composite on the positive side, with a rise of 48.86 points to 6,141.02, 404.41 to 43,386.84, and 194.36 to 20,167.91 respectively. This progression showed Wall Street’s slightly eased concerns about Trump’s tariffs after the initial uproar in April when extreme levies were suggested.
However, all eyes are still on the future implications of these tariffs, its potential detriments to the economy, and its inflationary effects. Interestingly, the current state of the economy seems moderately robust, even in the face of a possible slowdown. Data received on Thursday leaned toward the positive, including an increase in orders for durable goods like washing machines, surpassing economists’ predictions.
Additionally, the labor market showcased some resilience with fewer U.S. employees applying for unemployment benefits in the past week, pointing towards a potential reduction in workforce cuts. Conversely, a separate report indicated a larger contraction in the U.S. economy during the first quarter of 2025 than initially assessed.
Despite this, forecasts for the coming months remain more optimistic. In the bond market, the yield on the 10-year Treasury slipped to 4.24% from Wednesday’s closing at 4.29%. Mirroring this, the two-year Treasury yield, a barometer for Federal Reserve policy expectations, also decreased to 3.71% from 3.74%.
The Federal Reserve’s current strategy hinges heavily on the economic consequences that President Trump’s tariffs might trigger. It is poised to make a decision on when to recommence rate reductions after taking a breather throughout the year because of inflation concerns and a stimulated economy.
Simultaneously, President Trump persists in his demands for faster rate cuts. Two of Trump’s recent appointees to the Federal Reserve Board have echoed these views, expressing a readiness to consider a possible rate cut at the Fed’s upcoming meeting in July.
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