Stocks closed mostly higher Thursday after the latest round of economic data eased recession worries and financial shares jumped following the results of the Federal Reserve's annual stress test.
On the economic front, the final reading on gross domestic product (GDP) showed the U.S. economy grew at a 2% annualized pace in the first quarter, up from the previous reading of 1.3%. "The updated estimates primarily reflected upward revisions to exports and consumer spending that were partly offset by downward revisions to non-residential fixed investment and federal government spending," the report from the Bureau of Economic Analysis stated.
Elsewhere, data from the Labor Department showed that initial jobless claims fell by 26,000 last week to a seasonally adjusted 239,000, their lowest level since late May.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
While today's data fuels "optimism of a stronger and more resilient economy than previously thought," it also reinforces "the likelihood that the central bank will remain considerably more hawkish than investors anticipate," says José Torres, senior economist at Interactive Brokers.
Financial stocks boost Dow, S&P 500
Still, two of the three major indexes finished higher thanks to strength in financial stocks. The sector got a boost after the Fed released the results of its annual stress tests. These tests, which were created after the 2008 financial crisis, use hypothetical situations to measure how well the country's biggest banks could weather an extreme economic downturn. They also determine the amount of capital these big lenders can return to shareholders through stock buybacks and dividends.
Solid results this time around created tailwinds for the financial sector, with Dow stocks JPMorgan Chase (JPM, +3.5%) and Goldman Sachs (GS, +3.0%) being two of the biggest gainers Thursday.
As a result, the blue chip Dow Jones Industrial Average outperformed today, adding 0.8% to 34,122. The S&P 500 also gained ground, rising 0.5% to 4,396, while the Nasdaq Composite closed marginally lower at 13,591.
The best QQQ stocks
Despite today's slight decline, the Nasdaq is still headed toward an impressive first-half return, up 30% with one more session to go. This will mark the index's best 1H performance on record, according to Adam Turnquist, chief technical strategist for LPL Financial. And while there will likely be some bumps in the road going forward, "including the prospect of further rate hikes from the Fed, stubbornly high inflation, interest rate volatility and elevated recession risk," Turnquist says history suggests this strength could continue through the second half of the year.
We've mentioned in this space several times how investors can ride the momentum of the market, including scooping up the best tech stocks, the best growth stocks and – in the most talked-about trend on Wall Street right now – the best artificial intelligence (AI) stocks.
Another tack is to drill down on stocks in the Invesco QQQ Trust (QQQ), the exchange-traded fund that tracks the tech-heavy Nasdaq-100 Index (NDX). The fund has a long history of outperformance and more recently has seen strong returns thanks to surging demand for generative AI. Here, we take a look at nine of the best QQQ stocks for growth and innovation – and potential upside in the second half of the year. Check them out.
Related Content
-
December Fed Meeting: Live Updates and CommentaryThe December Fed meeting is one of the last key economic events of 2025, with Wall Street closely watching what Chair Powell & Co. will do about interest rates.
-
This Is Why Investors Shouldn't Romanticize BitcoinInvestors should treat bitcoin as the high-risk asset it is. A look at the data indicates a small portfolio allocation for most investors would be the safest.
-
I'm a Federal Benefits Pro: I Answer These 2 Questions a LotMany federal employees ask about rolling a TSP into an IRA and parsing options for survivor benefits, both especially critical topics.
-
Crypto Trends to Watch in 2026Cryptocurrency is still less than 20 years old, but it remains a fast-moving (and also maturing) market. Here are the crypto trends to watch for in 2026.
-
If You'd Put $1,000 Into Coca-Cola Stock 20 Years Ago, Here's What You'd Have TodayEven with its reliable dividend growth and generous stock buybacks, Coca-Cola has underperformed the broad market in the long term.
-
If You Put $1,000 into Qualcomm Stock 20 Years Ago, Here's What You Would Have TodayQualcomm stock has been a big disappointment for truly long-term investors.
-
If You'd Put $1,000 Into Home Depot Stock 20 Years Ago, Here's What You'd Have TodayHome Depot stock has been a buy-and-hold banger for truly long-term investors.
-
What the Rich Know About Investing That You Don'tPeople like Warren Buffett become people like Warren Buffett by following basic rules and being disciplined. Here's how to accumulate real wealth.
-
Stocks Swing in Volatile Session: Stock Market TodayThe main indexes fell sharply in early trading on rising China tensions, but rebounded thanks to encouraging bank earnings.
-
Dow Adds 587 Points as Stocks Bounce: Stock Market TodayThe main indexes rebounded sharply Monday after President Trump took a calmer stance toward China.
-
If You'd Put $1,000 Into Bank of America Stock 20 Years Ago, Here's What You'd Have TodayBank of America stock has been a massive buy-and-hold bust.
