Wall St investors buoyed by tariff relief

Wall Street's main indexes finished higher on Thursday, the second straight day of gains, as investors bought shares after US President Donald Trump rescinded tariff threats on European allies while data highlighted American economic resilience.

Investors have quickly returned to stock markets after Trump's Wednesday U-turn. Still, two days of gains have yet to fully erase losses the three US benchmarks took on Tuesday, when Trump's tariff threats sent shivers through global markets.

The Dow Jones Industrial Average rose 306.78 points, or 0.63 per cent, to 49,384.01, and the S&P 500 advanced 37.73 points, or 0.55 per cent, to 6,913.35. The Nasdaq Composite gained 211.20 points, or 0.91 per cent, to 23,436.02.

Earnings in focus

The earnings season is picking up pace and could test market sentiment as companies detail how consumer demand, cost pressures and a bumpy macro backdrop shaped their year-end performance.

Many of the so-called Magnificent Seven stocks - Alphabet, Amazon, Apple, Tesla, Meta Platforms, Microsoft, and Nvidia- are set to report earnings next week. Given their weighting on indexes, their performances have outsized influence on overall market direction. Their outlooks will be closely watched to see how much juice remains in the growth stories which so far have justified their sky-high valuations.

New data shows improving US economy

The latest economic data releases were also supportive of positive momentum.

US consumer spending increased solidly in November and October, likely keeping the economy on track for a third straight quarter of strong growth, the personal consumption expenditures index showed.

Separate data showed initial claims for state unemployment benefits increased less than expected last week, while the US economy grew by a slightly more-than-expected 4.4% in the third quarter of 2025.