U.S. stock markets experienced modest gains on Thursday amid a calm trading atmosphere, as investors processed a series of mixed economic reports that provided limited insights into the effects of President Trump’s ongoing trade tensions.
The S&P 500 index climbed by 0.4%, marking its fourth consecutive day of gains and bringing it within 3.7% of its record high reached earlier this year. The Dow Jones Industrial Average saw an increase of 271 points (0.6%), while the Nasdaq composite experienced a slight decline of 0.2%.
The positive momentum in the stock market was influenced by a decrease in Treasury yields, suggesting that the Federal Reserve might have greater leeway to consider interest rate cuts later this year to support the economy amid concerns over high tariffs. However, the economic data released was inconclusive regarding the risk of recession; while retail spending fell short of expectations for the previous month, wholesale inflation figures were more favorable than anticipated.
Despite recent efforts by China and the U.S. to ease trade tensions with a temporary halt on many tariffs, analysts caution that the broader implications of these tariffs are yet to fully manifest in economic indicators. Ellen Zentner, chief economic strategist at Morgan Stanley Wealth Management, emphasized that the trade situation remains complex and will take time to unfurl in the economic data.
Uncertainties were reflected in Walmart’s stock, which dipped 0.5% despite the company exceeding profit forecasts for the latest quarter. Walmart’s Chief Financial Officer John David Rainey highlighted the unpredictable nature of the market and chose not to provide profit guidance for the upcoming quarter, although the retailer expects sales to grow between 3.5% to 4.5% while grappling with higher costs stemming from tariffs.
Meanwhile, Deere, a leading equipment manufacturer, acknowledged facing “near-term market challenges” and adjusted its profit forecasts, citing a dynamic situation. Nonetheless, Deere’s stock surged by 3.8% after reporting a stronger-than-anticipated profit for the quarter.
Investors remain watchful as they navigate the ongoing complexities of the U.S. economy amid trade disputes, but the positive trends in certain sectors highlight the potential for resilience. With signs of adaptability among companies like Walmart and Deere, there remains hope for the economy to find a balanced path forward.