The Dow Jones Industrial Average rose 0.16% to a record 45,636.90, while the broad-based S&P 500 Index gained 0.32% to 6,501.86, also a record.
The Nasdaq Composite Index added 0.53% to 21,705.16.
The US saw its gross domestic product grow at an annualized rate of 3.3% in the second quarter, according to Thursday’s official update – higher than previously calculated and above market expectations.
The initial GDP estimate published in late July showed annualized growth of 3.0%, while investors had expected a revision to only 3.1%.
The upward revision mainly reflected improvements in investment and consumer spending, the commerce department said.
Growth was also bolstered by a decline in US imports, which are subtracted from GDP calculations. This drop occurred as businesses pulled back on shipments after rushing to stock up ahead of president Donald Trump’s tariff hikes.
Markets are anticipating a potential Federal Reserve rate cut at its September meeting, which could stimulate economic activity.
The market “is waiting a little bit to get some more information feeding into Fed decisions,” including next week’s job numbers, Victoria Fernandez of Crossmark Global Investments told AFP.
“After the initial release, there were concerns that the domestic economy was slowing quite sharply,” said Richard Flax, chief investment officer at Moneyfarm. “But these latest data suggest that the economy is a bit stronger than initially feared.”
The focus now shifts to Friday’s release of a key inflation reading and its potential impact on the outlook for additional rate cuts.
Despite the positive market sentiment, Nvidia shares fell 0.82%, adding to recent declines even after posting a profit of US$26.4 billion on record revenue of US$46.7 billion in the second quarter.
Investors had keenly awaited Wednesday’s earnings update from the California-based firm, whose remarkable growth has driven strong gains for tech stocks in recent months.
The earnings report comes amid market concerns over a potential spending bubble in the artificial intelligence sector that could hurt the chip giant’s prospects.
In Europe, the Paris stock market extended its recovery after tumbling early in the week on fears that France’s minority government could be toppled.
Prime minister Francois Bayrou had proposed a confidence vote over his budget cuts.
France’s borrowing costs have soared since the vote was called Monday, as the government struggles to find around €44 billion (US$51 billion) in savings.