S&P 500 and Nasdaq finish week at record high

Stocks rebounded Friday, after the US economy slowed less than expected in the second quarter. Both the S&P 500 (SPX) and the Nasdaq Composite (COMP) finished at new all-time highs, surpassing the records they set on Wednesday. The S&P closed 0.7% higher at 3,026 points, and the Nasdaq climbed 1.1% to 8,330 points. The Dow (INDU) also closed higher, up 0.2%, or 52 points. The index is just 0.6% off the record it set on July 15. The economy expanded at a pace of 2.1% between April and June, compared with the consensus estimate of 1.8%, according to a survey conducted by Refinitiv. Nevertheless, GDP came in slower than its rate of 3.1% in the first quarter. The report showed that the American consumer remained strong in the second quarter, both in terms of spending and confidence. Strong economic data could endanger next week’s expected and highly anticipated Federal Reserve interest rate cut. “This report suggests the economy enters the second half of the year in good shape. We expect better manufacturing and residential investment, while consumer spending will remain solid but with a somewhat slower growth rate,” wrote David Donabedian, chief investment officer of CIBC Private Wealth Management, in emailed comments. Chances of a quarter-percentage-point cut are just above 80%, according to the CME’s FedWatch tool. The yield on 10-year US Treasuries bounced slightly higher following the GDP report, but then returned to being flat at 2.0721% and the US dollar, measured by the ICE US Dollar Index, is 0.2% higher. Meanwhile earnings season continues to roar on. Twitter (TWTR) and McDonald’s (MCD) both reported before the bell, showing an increase in users for the social media platform and better-than-expected results for the fast-food chain. Late Thursday, internet giants Google (GOOG) and Amazon (AMZN) reported earnings. Google (GOOG) parent Alphabet beat estimates, while Amazon (AMZN) ended four consecutive quarters of record profits.