Stock market today: S&P 500 crosses 6,500, Dow hits record after Nvidia earnings, surprise GDP jump

US equities advanced to new records on Thursday, with the S&P 500 and Dow achieving all-time highs, driven by a robust Q2 GDP revision to 3.3% and declining jobless claims, underscoring economic resilience. Nvidia's shares pared initial post-earnings declines despite data center sales and China uncertainties, as CEO Jensen Huang reaffirmed "extraordinary" AI chip demand. Separately, Federal Reserve Governor Lisa Cook's lawsuit against President Trump presents a significant test of central bank independence.

Analysis

U.S. equity markets reached new all-time highs, with the S&P 500 surpassing the 6,500 mark and the Dow also setting a new record, reflecting broad investor optimism. This rally was underpinned by signs of a resilient economy, highlighted by a revised second-quarter GDP growth of 3.3% annualized, which surpassed both the initial estimate and consensus forecasts. The stronger-than-expected growth was driven by a rebound in consumer spending and a significant decrease in imports, the latter being a technical reversal from tariff-related front-running observed in Q1. Further bolstering this narrative, initial jobless claims fell to 229,000, indicating a persistently tight labor market. In the corporate sphere, Nvidia (NVDA) experienced a volatile session, closing down 0.8% after recovering from larger post-earnings losses. While the company delivered an earnings beat, disappointing data center sales and uncertainty over its China operations weighed on the stock, even as CEO Jensen Huang reaffirmed 'extraordinary' demand for its new AI GPUs. Looming over the market are the upcoming July PCE inflation data, a key input for Fed policy, and the unprecedented legal dispute between Fed Governor Lisa Cook and the President, which tests the central bank's independence.

Key Decisions for Investors

• Given the market's new highs driven by strong GDP data, investors should monitor Friday's PCE inflation report closely, as a hot reading could temper the current bullish sentiment and introduce volatility.
• For investors in Nvidia, the post-earnings share price dip may present a buying opportunity for those with a long-term conviction in the AI theme, but the noted weakness in data center sales and China-related geopolitical risks warrant careful monitoring.
• The escalating conflict between the executive branch and the Federal Reserve represents a material tail risk; investors should be cognizant of potential market instability if the perceived independence of the central bank is compromised.