NEW YORK (AP) — Wall Street had one of its best days of the year on Thursday after data showed that the U.S. economy holds better than expectedin particular the buyers of the land.

The S&P 500 rose 1.6%, marking the fourth-best day of the year and sixth consecutive gain, as the U.S. stock market recovered after a few frightening weeksAfter briefly falling by almost 10%, the price is now back to 2.2% below its all-time high from last month.

The Dow Jones Industrial Average rose 554 points, or 1.4%, while the Nasdaq Composite gained 2.3% as Nvidia and other big tech stocks recovered from their setbacks last month.

US Treasury yields also jumped following the encouraging economic report. One of the reports said US shoppers increased their retail spending last month by far more than economists expected, while another report said fewer US workers filed for unemployment benefits.

A year ago, such reports could have rocked the stock market for fear that they would inflation higher. But good news for the economy is once again good news for Wall Street, especially after a report showed that the U.S. Employers withdrew their hiring quota last month by much more than expected.

This failure of the labor market report raised fears that the US economy could collapse under the burden of high interest rates brought by the Federal Reserveand it contributed to Turbulence on the stock markets worldwide. But Thursday’s reports suggest that a perfect landing may still be possible, with the Fed the growth of the economy just enough through high prices to curb inflation, but not so much that it causes a recession.

“The growth fear is not over yet, but it is a little less scary,” said Brian Jacobsen, chief economist at Annex Wealth Management.

Inflation has also improved since it topped 9% two summers ago, as was confirmed by reports earlier this week on prices on both the consumer And wholesale level. This clears the way for the Federal Reserve to soon make the interest rate cuts that Wall Street loves so much.

Walmart added to the optimism after it announced a bigger profit for spring than analysts expected, and shares rose 6.6%. The retail giant also raised its full-year sales forecast, suggesting that U.S. shoppers will continue to have money to spend. U.S. consumer spending accounts for the bulk of the economy.

It was just one of several large companies that joined the ranks of companies whose profits exceeded analysts’ expectations in the spring.

Deere & Co. rose 6.3 percent after the seller of backhoe loaders, bulldozers and other equipment reported higher-than-expected profits and sales despite difficult conditions in the global agricultural and construction sectors.

Cisco Systems’ earnings and revenue last quarter significantly exceeded analysts’ forecasts, and the stock rose 6.8% after the network equipment maker also announced Thousands of jobs will be cut as it shifts to faster-growing technology areas such as artificial intelligence.

Ulta Beauty stock rose 11.2%, helping to lead the market after Warren Buffett’s Berkshire Hathaway announced it had acquired a stake in the retailer.

Overall, the S&P 500 rose 88.01 points to 5,543.22. The Dow rose 554.67 to 40,563.06 and the Nasdaq Composite rose 401.89 to 17,594.50.

In the bond market, the yield on 10-year government bonds climbed to 3.91% from 3.84% late Wednesday following strong economic data.

The yield on two-year Treasury notes, which is more in line with expectations for Federal Reserve action, rose to 4.09% from 3.96% late Wednesday.

Traders continue to expect that the Federal Reserve lowered the key interest rate at their next meeting in September, which would be the first such cut since the COVID crash in 2020. But they now largely expect the Fed to cut rates by the traditional quarter percentage point, according to Data from CME Group.

A week ago, many traders predicted a greater cut of half a percentage point This was because at that time there were fears of a slowdown in the growth of the US economy.

The Fed made it clear what a tightrope it was walking when it began raising interest rates sharply in March 2022: being too aggressive would stall the economy, while being too soft would fuel inflation and hurt everyone.

The signals of a robust US economy contributed to smaller stocks particularly on Thursday. Smaller companies have more to thank for the strength of the U.S. economy than large multinationals, and the Russell 2000 index of smaller stocks rose 2.5%, helping lead the market.

Smaller stocks saw even bigger swings than the rest of the market, rising more than the S&P 500 despite data suggesting the U.S. economy is doing well and interest rates will soon fall. However, they fell more when pessimism increases.

Indices also rose on foreign stock markets in large parts of Asia and Europe.

Japan’s Nikkei 225 rose 0.8% after data showed Economy returned to growth path in spring. The The British economy also grew last quarter was a welcome sign after a dry spell, and the FTSE 100 rose 0.8 percent in London.

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AP business writer Yuri Kageyama contributed.