Wall Street Eyes Sixth Positive Session On Upbeat Economic Data, Bonds Fall As Traders Lose Conviction In Large Rate Cuts (CORRECTED)

TLT

UUP

SPY

DIA

Editor’s note: This story has been updated to correct a subheading on Thursday’s stock movers.

Thursday saw one of the most pronounced risk-on sessions in Wall Street’s rebound from the selloff earlier in the month, as investors cheered the latest economic data, suggesting that earlier recession fears were likely overblown.

Small-cap stocks outperformed their larger counterparts, with the Russell 2000 index soaring nearly 3% for its best day in a month. Both the S&P 500 and Nasdaq 100 are on track to extend their winning streaks to six consecutive sessions.

Robust retail sales figures for July, far exceeding expectations, and a decline in initial jobless claims contributed to the market’s enthusiasm.

Retail sales figures released for July showed a 1% month-over-month increase, significantly higher than the 0.3% expected by analysts and a sharp rebound from June’s stagnation. This data, coupled with a decrease in initial unemployment claims last week to 227,000, provided a strong signal the U.S. economy might be more resilient than previously thought.

The positive economic data led to a shift in expectations regarding future Federal Reserve actions. The likelihood of a 50-basis-point rate cut in September diminished, with traders now assigning a 73% probability to a smaller 25-basis-point cut.

As expectations for aggressive monetary easing faded, bond yields surged, causing a 1.1% decline in the iShares 20+ Year Treasury Bond ETF TLT. The U.S. dollar also strengthened, with the Invesco DB USD Index Bullish Fund ETF UUP rising 0.3%, bolstered by a widening yield differential that pushed the greenback up over 1% against the Japanese yen.

In commodities, gold edged up 0.4%, while silver saw a substantial 3% rally. Crude oil prices rose by 1.6%, closing at $77.60 per barrel. Bitcoin also experienced a 2% gain, reflecting the broader risk-on sentiment in the market.

Thursday’s Performance In Major US Indices, ETFs

Major Indices	1-day %chg
Russell 2000	3.0%
Nasdaq 100	2.3%
S&P 500	1.6%
Dow Jones	1.3%

According to Benzinga Pro data:

The SPDR S&P 500 ETF Trust SPY was 1.6% higher to $552.26.
The SPDR Dow Jones Industrial Average DIA rose 1.3% to $405.32.
The tech-heavy Invesco QQQ Trust Series QQQ rallied 2.4% to $473.46.
The iShares Russell 2000 ETF IWM rocketed 3% to $212.89.
The Technology Select Sector SPDR Fund XLK outperformed, up by 2.5%. The Real Estate Select Sector SPDR Fund XLRE lagged, down by 0.3%.

Thursday’s Stock Movers

Ulta Beauty Inc. ULTA skyrocketed by 12% after Warren Buffett’s Berkshire Hathaway revealed a significant new investment of approximately $260 million in the company.
Cisco Systems Inc. CSCO rallied 7% after reporting stronger-than-expected results last quarter.
Other stocks moving in reaction to earnings reports included Alibaba Group Holding Limited BABA, up 0.3%, AST SpaceMobil Inc. ASTS, up 43%, Deere & Company DE, up 6.6%, monday.com Ltd. MNDY, up 1.1%, JD.com, Inc. JD, up 4.4% and Walmart Inc. WMT, up 6.5%.
Companies reporting after the close are Applied Materials, Inc. MAT, Coherent Corp. COHR and H&R Block, Inc. HRB