The Dow Jones hit new record highs on Tuesday on Wall Street, supported by better-than-expected retail sales data and a mostly upbeat set of quarterly corporate results.
The Dow Jones Industrial Average closed at 40,954.48 points, up 1.9%, the S&P500 was at 5,667.20 points, up 0.64%, and the Nasdaq Composite gained 0.2% to 18,509.34 points.
June retail sales rises point to stronger consumption
U.S. retail sales were unchanged in June on a monthly basis, data showed on Tuesday, following an upwardly revised gain of 0.3% in May.
This release was stronger than the expected 0.3% drop, after a previously reported 0.1% gain in May, pointing to still-strong consumer spending that could likely limit the amount of rate cuts the Federal Reserve makes.
“Even if the Fed were to choose to open the door to rate cuts as early as the third quarter, its action is likely to be limited, disappointing investors’ hopes for a return to neutral or lower at some point soon,” Stifel Financial Corp. said in a note Tuesday.
Traders are pricing in an 89% chance that the central bank will cut rates by 25 basis points in September.
BofA and UnitedHealth quarterly earnings impress
Wall Street banks continued to dominate the gains, with Bank of America rose 5% after the lender reported second-quarter revenue and earnings that beat expectations due to rising investment banking and asset management fees.
Morgan Stanley rose 2 percent after better-than-expected results, but brokerage Charles Schwab said it would pause buybacks to pay down debt and reported net interest margin that fell short of estimates.
Unitedhealth Group, a major component of the Dow, rose 6% after the health insurance giant reported second-quarter numbers that beat on both the bottom line and revenue, despite headwinds in its Medicaid business.
Match group attracts activist interest; Reddit falls to Loop demotion
Match Group shares rose more than 8% after a report showed activist investor Starboard has a stake of more than 6.5% in the Tinder owner and is pushing the company to make changes to improve margins or go private.
Reddit Inc plunged more than 7% after Loop Capital downgraded the social media company to hold from buy, citing valuation concerns.
Shares of Trump Media & Technology Group fell 9.7%, retreating after closing up 31% the day before.
Trump names running mate as attempted murder boosts presidential odds
Wall Street has largely ignored any political uncertainty stemming from the attempted assassination of Trump at a rally in Pennsylvania over the weekend.
On Monday, the former president was officially nominated as the Republican front-runner for the 2024 presidential race and named Ohio Sen. JD Vance as his vice presidential running mate.
According to analysts, Trump’s chances of victory have increased sharply after the weekend shooting and that a new presidency by him presents the prospect of a more flexible regulatory environment in the country.
Source: Ambito
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