Dow Jones Index Surges to 8-Week High on Strong Earnings and Economic Optimism

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By Daemon7

The S&P 500, Dow Jones, and Nasdaq indices closed higher on Thursday, with the Dow Jones Industrials reaching an 8-week high. The rally was driven by strong corporate earnings reports and optimism about the US economy.

International Business Machines (IBM) led the charge, surging over 12% after forecasting full-year free cash flow above consensus. Lam Research (LRCX) also gained over 7% .

…Lam Research (LRCX) also gained over 7% after reporting stronger-than-expected Q2 revenue and forecasting Q3 revenue above consensus. Thermo Fisher Scientific (TMO) rose over 6% after reporting Q4 revenue above consensus.

Additionally, signs of strong US consumer spending boosted confidence in the economic outlook, with Q4 personal consumption rising 4.2%, beating expectations of 3.2%. This sentiment was further supported by a decline in weekly initial unemployment claims.

However, not all news was positive. Microsoft (MSFT) fell over 6% after reporting lower-than-expected Q2 earnings, while United Parcel Service (UPS) dropped over 14% after forecasting full-year revenue below consensus.

The market was also affected by President Trump’s announcement that he would impose 25% tariffs on imports from Canada and Mexico, citing the flow of fentanyl and large trade deficits. This news caused stocks to pull back from their highs.

Overall, the US economy reported mixed results, with Q4 GDP growing 2.3% (annualized), below expectations of 2.6%. However, the core PCE deflator rose 2.5%, indicating steady inflation. Despite this, investors remained optimistic about the economy and stocks, driven by strong earnings and consumer spending.

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