US stocks swung higher on Thursday, extending yesterday's gains as markets continued to assess the shape of the economy amid risks from tariffs and lower government spending.
US stocks erase losses
The three main averages were around 0.3% higher, with investors digesting mixed economic signals and the Federal Reserve’s latest policy stance. Equities had already risen sharply in the prior session after the Fed held rates steady, as widely expected.
Fed Chair Jerome Powell sought to reassure markets, downplaying concerns that President Trump's proposed tariffs could significantly impact inflation, calling their effects "transitory." However, the latest FOMC projections indicated a softer economic outlook, with downward revisions to GDP growth and higher unemployment forecasts. This led markets to price in three rate cuts by the Fed this year, slightly more dovish than the Fed’s own projections of two rate cuts. Investors remain focused on upcoming economic data to gauge whether inflation is cooling fast enough to justify the anticipated easing cycle.
Best and worst performers
Among individual stocks, Meta was among the top gainers, jumping 2.7% on renewed optimism about its AI-driven growth strategy. Other major tech names, including Eli Lilly, Nvidia, and Amazon, also climbed more than 1%, contributing to broader market strength. However, not all stocks participated in the rally—US-listed shares of PDD Holdings traded in the red after the Chinese e-commerce giant missed sales expectations, raising concerns about consumer demand trends.
Investors also kept a close eye on earnings, with Micron and Nike set to report results after the bell. Their performance could provide additional insights into the semiconductor and retail sectors, offering clues about consumer spending trends and supply chain conditions. Looking ahead, markets remain on edge for any shifts in monetary policy rhetoric or economic data surprises that could sway rate expectations and stock valuations.
