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Wall Street stocks close higher, Delta forecast boosts sentiment

Investors were encouraged by a positive forecast from Delta Air Lines.

Delta shares rose after the airline forecast profits for its third quarter and full year above Wall Street expectations.

United Airlines and American Airlines both rallied, bringing the total to a record high. The Dow Transportation Index (widely considered an economic barometer) hit its highest level since late February.

Nvidia's return for the second day in a row to its $4 trillion valuation mark was also a positive.

Initial Jobless Claims

A poll showed that the number of people who voted for the week ending July 5 was 227,000. This is below the consensus figure of 235,000. This was a seven-week record low, although holiday data such as the Fourth of July break last week can be volatile.

Mark Luschini is the chief investment strategist of Janney Montgomery Scott, a Philadelphia-based firm. He said that investors were reassured by the Delta update and "pretty mild" jobless claims.

The strategist stated that "collectively, that helped to reintroduce the risk-on-mode that was in full blossom yesterday and carried over today." He added that investors have become "increasingly numb" to the threat of inflation and unemployment posed by tariffs.

Luschini said that investors at the moment are ignoring or ignoring this threat. They won't be able to do so until there is hard evidence.

Preliminary data shows that the S&P 500 rose 16.44 points or 0.26% to 6,279.70, and the Nasdaq Composite increased 20.03 points or 0.10% to 20,631.37. The Dow Jones Industrial Average increased 189.27, or 0.43% to 44,647.57.

Wall Street's major indices reached record highs last week, following the sharp sell-off in April after "Liberation Day's" tariff announcements.

You're ticking off the boxes of uncertainty. Last week, you had the large bill passed. This was a major uncertainty that is now gone. Tariffs are becoming more clear. You're beginning to see more clarity on tariffs.

Next week, the second quarter earnings season will begin and we'll be able to see how companies are coping with tariffs.

Trump's recent announcements include a new tariff of 50% on copper that will begin on August 1, and a threat to impose a 50% tariff on goods exported from Brazil to the U.S. Trump also sent tariff notices to his other trading partners.

Investors are closely watching the trade negotiations as they progress.

Minutes

The Federal Reserve released a statement on Wednesday revealing that the majority of policymakers expect rate cuts in 2019. They believe the inflationary impact from tariffs will be "temporary or moderate."

According to CME Group’s FedWatch tool, while most investors think a rate cut in July is out of the question, the odds for a 25-basis point cut in September have increased to 64%.

The earliest the upcoming changes will be is late this year, or possibly even 2026.

The true impact of increasing import tariffs

Alberto Musalem, St. Louis Fed president, said that inflation is a major concern, which is why Fed officials are cautious when it comes to rate cuts.

WK Kellogg, among other stocks rose sharply after reports that Italian candy manufacturer Ferrero is nearing an agreement to buy the cereal producer.

But Conagra Brands shares sank after

Forecast

Annual profit below Wall Street expectations citing higher

Tariff-related costs

Due to tariffs on metals and imports from China, Hunt's has been forced to raise prices for its products. Reporting by Sinead carew in New York and Terence Gabriel, Pranav Kashyap, and Nikhil sharma in Bengaluru. Editing by Maju samuel and David Gregorio.

(source: Reuters)