Stock Market Today: U.S. Stocks Climb on Retail Sales Growth and Solid Earnings Reports

US stocks are reaching toward new record highs today as strong retail sales and positive earnings reports fuel optimism. The S&P 500 (GSPC) rose by 0.5%, while the Nasdaq Composite (IXIC) gained 0.8%, both on track to close at all-time highs. Meanwhile, the Dow Jones Industrial Average (DJI) rose 0.4%. Investors continue to weigh the latest economic data alongside the impact of President Trump’s actions on the Federal Reserve and his tariff policies.

Market Movers:

• Nvidia (NVDA): +1.08%: Nvidia continues to climb, benefiting from the increased demand for AI chips. The chipmaker has seen growing optimism due to the potential easing of export restrictions, and its stock is one of the standout performers in tech today.
• PepsiCo (PEP): +0.76%: PepsiCo reported a surprise rise in revenue, which helped lift its stock. Despite concerns over inflationary pressures, the company's performance in the beverage and snack sectors showed strong resilience, lifting investor confidence.
• TSMC (TSM): +3.6%: TSMC posted record profits driven by strong demand for its AI chips, especially for clients like Nvidia. The semiconductor giant's results gave a boost to other chipmakers, with investors optimistic about continued demand for AI-related hardware.
• Circle Internet Group (CRCL): +14%: Circle surged after the GENIUS Act, aimed at providing a stablecoin framework, gained renewed momentum in Congress. Investors are hopeful the bill’s passage will pave the way for a more structured and regulated crypto market.

Retail Sales and Economic Data

Retail sales rebounded in June, a positive moment for the economy and a sign that consumer spending has remained resilient despite the ongoing tariff uncertainty. The data showed that the US consumer is still strong, a key driver of economic growth. This positive retail performance contrasts with concerns over President Trump’s trade policies, which many feared would dampen consumer spending.

Additionally, jobless claims for the week ending July 12 came in at 221,000, the lowest level in three months. This indicates continued strength in the job market, reinforcing the view that the economy remains robust.

Earnings Season Kicks Off

Earnings reports have been another major factor driving market optimism. Companies like Bank of America and Johnson & Johnson have reported strong results, with the latter raising its full-year earnings forecast. These positive earnings surprises have helped offset concerns over rising inflation and tariffs.

On the deck, Netflix is expected to report after the bell, and investors will be looking for signs that the streaming giant can maintain its momentum in the face of growing competition in the tech sector.

Trump, Tariffs, and the Fed

While economic data has been mostly positive, President Trump’s renewed attacks on the Federal Reserve, particularly Chair Jerome Powell, have added some uncertainty to the market. Trump has consistently called for lower interest rates but has also hinted at the possibility of removing Powell from his position. While Trump clarified that he is not "planning" to fire Powell, the ongoing pressure is something that markets are closely monitoring.

Investors are pricing in a growing probability that the Federal Reserve will hold rates steady in its upcoming meetings, following mixed inflation data and weak signs of economic overheating. Traders are now seeing a 54% chance of a rate cut by September, down from 70% last week.

Looking Ahead

The stock market is likely to continue its upward trajectory as positive earnings and retail sales data outweigh concerns over tariffs and inflation. However, the uncertainty surrounding the Federal Reserve’s actions and Trump’s continued pressure on Powell could introduce volatility in the short term. Investors will also be keeping an eye on the ongoing legislative developments, particularly regarding stablecoin regulation and the potential impact on the broader crypto market.

The coming days will be crucial, as more companies report earnings, and Congress moves closer to voting on the GENIUS Act and other significant crypto-related legislation. This could further shape market sentiment in the short term.