US stocks soar after healthy retail sales point to soft landing

U.S. stocks rose strongly Thursday, after healthy economic data pointed to a soft landing for the U.S. economy while not preventing a Federal Reserve rate cut.

At 09:35 ET (13:35 GMT), the Dow Jones Industrial Average rose 490 points, or 1.2%, the S&P 500 rose 50 points, or 0.9%, and the NASDAQ Composite rose 200 points, or 1.2%. Retail sales suggest consumer resilience 

U.S. retail sales rose by a larger than expected amount in July, pointing to resilience in consumer spending activity, allaying fears of an imminent recession in the world's biggest economy.

Retail sales rose by 1% last month, accelerating from an unchanged reading in June, according to Commerce Department data released earlier Thursday, more than the 0.4% expected.

On an annual basis, retail sales  rose by 2.7%, having increased by a revised lower 2.0% in June. 

Additionally, the number of Americans filing new applications for unemployment benefits fell last week, reinforcing concerns of a gradual softening of the labor market.

Softer CPI and producer price index readings this week suggested inflation was cooling, raising expectations of an interest rate cut in September.  Walmart earnings surge

In the corporate sector, Walmart (NYSE:WMT ) stock rose nearly 8% after the retail giant, often considered as a bellwether for retail demand, reported its second-quarter earnings on Thursday, topping analyst expectations, driven by robust e-commerce growth and improved margins.

The earnings come after rival Home Depot (NYSE:HD ) warned of a weaker annual profit and clocked a bigger-than-expected drop in its annual comparable sales earlier this week. 

Cisco Systems (NASDAQ:CSCO ) stock gained 9% after the networking equipment giant reported better-than-expected fourth-quarter earnings and announced a restructuring plan.

Additionally, Ulta Beauty (NASDAQ:ULTA ) stock soared 13% after Warren Buffett’s Berkshire Hathaway (NYSE:BRKb ) reported a new stake in the cosmetics company, while Nike (NYSE:NKE ) stock gained 4% after Bill Ackman’s Pershing Square revealed a position in the sports footwear retailer. Crude rises despite US inventories rise 

Crude prices rose Thursday, supported by optimism that potential U.S. interest rate cuts will boost economic activity, although gains have been limited by a surprise rise in U.S. stockpiles. 

By 09:35 ET, the U.S. crude futures (WTI) climbed 1.2% to $77.88 a barrel, while the Brent contract rose 1.1% to $80.65 a barrel.

Risk sentiment has been on the rise of late as benign inflation data reinforcing expectations the Federal Reserve will cut interest rates next month, likely boosting demand for crude from the world’s largest consumer.

However, both benchmarks fell more than 1% on Wednesday and the gains this session have been limited by data showing U.S. crude inventories  rose unexpectedly last week.

U.S. crude oil stockpiles rose by 1.4 million barrels in the week ended Aug. 9, raising concerns about weaker demand ahead as the summer driving season draws to an end. 

(Ambar Warrick contributed to this article.)

Source: Investing.com