US stocks surge as consumer spending surprises to upside

The S&P 500 was up 1.6% on Thursday, while both the tech-heavy Nasdaq 100 and the Russell 2000 jumped 2.5%.

The S&P 500 extended its winning streak to six sessions on data that underscored the resilience of consumers. Retail sales rose by 1% in July, much more than anticipated, and Walmart posted earnings that beat estimates. The weekly jobless claims also declined compared to last week and were below expectations, allaying fears of a weakening labor market.

Bond prices tumbled, and policy-sensitive two-year Treasury yields jumped more than 14 basis points to 4.09%, the highest closing level since the beginning of August. Traders now see less than 100 basis points of rate cuts in store through year-end.

Consumer discretionary was the best-performing S&P sector ETF, gaining 3.2% as it benefits from the retail sales relief. The real estate sector was the worst-performing, with a 0.3% retreat, followed by the utilities sector as the only other S&P ETF in negative territory.

Ulta Beauty was the biggest gainer among all S&P stocks on Thursday, up 11.2% at closing. Public filings released on Wednesday evening showed that Warren Buffett’s Berkshire Hathaway bought a small position in the company, which was worth $266 million in total at the end of June.