S&P 500, Nasdaq Notch Record Highs Following Fed Official's Comments

05:00 PM EDT, 07/10/2025 (MT Newswires) -- The S&P 500 and the Nasdaq Composite notched new record closing highs on Thursday as traders digested remarks by a Federal Reserve official while brushing aside any tariffs worries.

The S&P 500 rose 0.3% to 6,280.5, while the Nasdaq edged up 0.1% to 20,630.7. The Dow Jones Industrial Average climbed 0.4% to 44,650.6. Most sectors ended in the green, led by consumer discretionary, while communication services and technology were the only decliners.

"S&P 500 is nearly overbought and investor sentiment/exposure is rising but we remain sanguine," Wedbush Securities analyst Seth Basham said. "Market breadth is improving, interest rates are likely to move lower and stimulus (front-loaded tax cuts) should help lessen the blow of tariffs and the weakening 'under-the-hood' jobs picture."

St. Louis Fed President Alberto Musalem said Thursday it is too soon to determine whether tariffs will have a persistent impact on inflation, Bloomberg News reported.

"It's going to take time for the tariffs to settle," Musalem reportedly said. "There's a scenario where we could be in (the fourth quarter) this year, or (the first or second quarter) of next year where tariffs are still working themselves into the economy."

On Wednesday, minutes from the central bank's June meeting showed that policymakers offered mixed views on the monetary policy path ahead, with opinions ranging from "some reduction" in interest rates this year to no cuts at all.

At the meeting, the Federal Open Market Committee decided to keep its benchmark lending rate unchanged for a fourth straight time, while sticking to its federal funds rate outlook for 2025 amid higher inflation expectations.

US Treasury yields were higher, with the two-year rate adding 2.7 basis points to 3.89% and the 10-year rate increasing 1.1 basis points to 4.35%.

Brazil will respond to US President Donald Trump's planned 50% tariff rate on the country in accordance with its economic reciprocity law, CNBC reported, citing Brazilian President Luiz Inacio Lula da Silva.

In a letter sent to Brazil on Wednesday, Trump said he will impose 50% tariffs on the country's products, effective Aug. 1. Trump criticized the ongoing prosecution of the country's former president, Jair Bolsonaro.

Trump confirmed in a separate social media post Wednesday that the recently announced duties of 50% on copper imports are set to come into effect at the beginning of next month.

West Texas Intermediate crude oil was down 2.2% at $66.88 a barrel in Thursday late-afternoon trade. Oil prices dropped as traders assessed the impact of tariffs, D.A. Davidson said in a client note.

In company news, WK Kellogg (KLG) shares surged 31% after the cereal maker agreed to be acquired by Ferrero Group in a $3.1 billion all-cash deal.

Delta Air Lines (DAL) logged better-than-expected second-quarter results as demand trends stabilized, while the air carrier restored its earnings guidance for the full year. Delta Air shares jumped 12%, the second-top gainer on the S&P 500 following United Airlines (UAL), which soared 14%. Southwest Airlines (LUV) was the third-best performer, with an 8.1% gain.

MP Materials (MP) shares surged nearly 51%. The rare earths miner outlined a plan to construct a rare-earth magnet manufacturing facility in the US as part of a private-public partnership with the Department of Defense, which will become the largest shareholder in the company.

Autodesk (ADSK) is mulling a potential acquisition of engineering-software provider PTC (PTC), Bloomberg News reported, citing unnamed sources. Autodesk (ADSK) shares were down 6.9%, among the worst performers on the S&P 500, while PTC dropped 7.6%, the second-biggest decliner on the index.

In economic news, government data showed weekly applications for unemployment insurance in the US unexpectedly fell, while continuing claims reached the highest since November 2021.

Gold was up 0.4% at $3,333.8 per troy ounce, while silver rose 2.7% to $37.63 per ounce.

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