U.S. equities finished higher, with the S&P 500 and Nasdaq notching more record highs along the way, as upbeat sentiment following a stronger-than-expected Q2 GDP report was kept in check with uncertainty surrounding how the Fed may comprehend the data with its highly-anticipated policy meeting looming next week. News on the equity front surrounded earnings, as Dow member McDonald’s, along with Google parent Alphabet and Starbucks, posted positive results, while Amazon offered a mixed report. Elsewhere, Sprint and T-Mobile US reached a deal with the U.S. Department of Justice surrounding its proposed $26 billion merger. Treasury yields were mixed, as were crude oil prices, while the U.S. dollar and gold were higher.

The Dow Jones Industrial Average (DJIA) rose 52 points (0.2%) to 27,192, the S&P 500 Index increased 22 points (0.7%) to 3,026 and the Nasdaq Composite jumped 92 points (1.1%) to 8,330. In moderate volume, 736 million shares were traded on the NYSE and 1.9 billion shares changed hands on the Nasdaq. WTI crude oil ticked $0.18 higher to $56.20 per barrel and wholesale gasoline was down $0.01 at $1.82 per gallon. Elsewhere, the Bloomberg gold spot price added $2.29 to $1,416.87 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—gained 0.2% to 98.00. Markets were higher for the week, as the DJIA increased 0.1%, the S&P 500 Index rose 1.7% and the Nasdaq Composite advanced 2.3%.

The first look (of three) at Q2 Gross Domestic Product the broadest measure of economic output, showed a quarter-over-quarter (q/q) annualized rate of expansion of 2.1%, after the unrevised 3.1% expansion in Q1, and above the 1.8% growth forecasted by Bloomberg. Personal consumption gained 4.3%, north of forecasts of a 4.0% rise, and following the upwardly-adjusted 1.1% increase recorded in Q1. Along with the strong personal consumption, government spending also was a notable positive contribution in Q2, partially offset by negative contributions from private inventory investment, exports, nonresidential fixed investment and residential fixed investment.

On inflation, the GDP Price Index came in at a 2.4% rise, above expectations of a 2.0% gain and the upwardly-revised 1.1% increase seen in Q1, while the core PCE Index, which excludes food and energy, moved 1.8% higher, south of expectations of a 2.0% increase, and following the downwardly-adjusted 1.1% advance in Q1.

Treasuries were mixed, as the yield on the 2-year note ticked 1 basis point higher to 1.87%, while the yield on the 10-year note was flat at 2.07%, and the 30-year bond rate lost 1 basis point to 2.59%.

©2019 Charles Schwab & Co., Inc., Member SIPC. All rights reserved.

Schwab Center for Financial Research (“SCFR”) is a division of Charles Schwab & Co., Inc. The information contained herein is obtained from third-party sources and believed to be reliable, but its accuracy or completeness is not guaranteed. This report is for informational purposes only and is not a solicitation, or a recommendation that any particular investor should purchase or sell any particular security. The investment information mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision. All expressions of opinions are subject to change without notice in reaction to shifting market conditions.