NEW YORK, June 26 (Xinhua) -- U.S. stocks saw solid gains and flirted with record highs on Thursday as investors weighed mixed economic data and remarks from Federal Reserve officials regarding the potential for interest rate cuts.
The Dow Jones Industrial Average rose 404.41 points, or 0.94 percent, to 43,386.84. The S&P 500 climbed 48.86 points, or 0.80 percent, to 6,141.02, which is just shy of the record close high of 6,144.15 on Feb. 19, 2025. The Nasdaq Composite Index gained 194.36 points, or 0.97 percent, to finish at 20,167.91, barely missing record closes.
Nine of the 11 primary S&P 500 sectors ended in positive territory. Communication services and energy led the gains, rising 1.77 percent and 1.50 percent, respectively. Real estate and consumer staples were the only sectors to decline, falling 0.64 percent and 0.18 percent.
On the economic front, U.S. gross domestic product (GDP) contracted at an annual rate of 0.5 percent in the first quarter, according to the Commerce Department's final estimate. That marks a deeper decline than earlier estimates of 0.3 percent and 0.2 percent.
Meanwhile, initial claims for unemployment benefits fell by 10,000 to a seasonally adjusted 236,000 for the week ended June 21, better than economists' expectations of 245,000. "The data are consistent with softening of labor market conditions, particularly on the hiring side of the labor market equation," said Nancy Vanden Houten, lead economist at Oxford Economics. "For now, we don't think the labor market is weak enough to prompt the Fed to cut rates before December, but the risk is increasing that once the Fed starts to lower rates, it will have some catching up to do."
U.S. durable goods orders rebounded sharply, surging 16.4 percent in May after a revised 6.6 percent decline in April, according to the Commerce Department. However, new orders excluding the transportation sector only expanded 0.5 percent from the previous month, suggesting the distortion by new Boeing contracts.
Political tensions also lingered over the central bank's independence, with speculation growing around U.S. President Donald Trump potentially installing a "shadow chair" to influence Fed policy ahead of the 2026 end of Fed Chair Jerome Powell's term. However, Chicago Fed President Austan Goolsbee dismissed such concerns in a CNBC interview.
"That would have no effect on the FOMC (Federal Open Market Committee) itself," Goolsbee said. "Just look at the minutes and transcripts. You can see, word for word, what the rationale are in making the decisions, and they're not about elections and they're not about partisan politics."
Mega-cap technology companies mostly advanced. Nvidia rose 0.46 percent to a new record high, extending gains from the previous session that reinstated its position as the world's most valuable company. Broadcom gained more than 2 percent, as did Amazon and Meta Platforms. Microsoft and Alphabet each gained more than 1 percent. Tesla and Apple slipped modestly.
Despite signs of easing tensions, global economic growth remains under pressure. Fitch Ratings projected world GDP growth of just 2.2 percent in both 2025 and 2026, below the historical average of 2.7 percent, and forecast U.S. growth of only 1.5 percent this year.
"Tariffs will push up inflation, labor-force growth is slowing sharply, and some inflation expectation measures remain high," the Fitch team said, adding that they expect only a single interest-rate cut from the Federal Reserve this year. ■
