*

Indexes up: Dow 0.46%, S&P 500 0.46%, Nasdaq 0.74%

*

Chip stocks jump after TSMC's record quarterly profit

*

PepsiCo ( PEP ) expects smaller decline in annual core profit,

shares up

*

June retail sales rise 0.6%

(Updates market prices to 2:15 p.m., adds details and comments)

By Pranav Kashyap and David French

July 17 (Reuters) - The Nasdaq Composite rose to

a record high on Thursday, with Wall Street's other major

indexes also advancing, as strong economic data and positive

earnings reports cheered investors.

U.S. retail sales bounced back sharply in June, signaling

renewed economic momentum and confidence among consumers.

The data was the latest set in a week regarded as a

proving ground for the staying power of strong market gains

since April and a clue to the timing of potential interest rate

cuts by the Federal Reserve.

Economic data has been somewhat mixed, with strong

retail sales combined with stalled producer prices and a spike

in consumer inflation in June, and a spike in consumer inflation

in the same month. Investors believe the U.S. central bank will

hold off on rate cuts as it weighs the inflationary impact of

President Donald Trump's import tariffs.

Traders now peg the odds of a September rate cut at just

over 54%, with a July move nearly ruled out, according to CME's

FedWatch tool.

"The Fed is going to be more cautious and data-driven

than what the market wants them to do," said Jason Barsema,

president of Halo Investing.

Fed Governor Adriana Kugler warned that rate cuts are on

hold for now, as Trump's tariffs begin to push up consumer

prices and tight policy remains key to keeping inflation

expectations in check.

U.S. Treasury yields also edged lower following the retail

sales data.

At 2:15 p.m. ET, the Dow Jones Industrial Average

rose 202.04 points, or 0.46%, to 44,457.00, the S&P 500

increased 28.94 points, or 0.46%, to 6,292.72, and the Nasdaq

Composite gained 153.86 points, or 0.74%, to 20,884.35.

Accompanying strong retail sales was upbeat commentary

from consumer-facing American companies.

PepsiCo ( PEP ) forecast upbeat results, fueled by demand

for energy drinks and healthier sodas, helping offset concerns

about a dip in annual core profit. The company's shares jumped

6.9%.

United Airlines gained 3.2% after the carrier

projected stronger demand since early July, offering a rare

bright spot for an industry strained by Trump's budget cuts and

trade tensions.

Rivals Delta and American Airlines ( AAL ) also

climbed over 1% each.

"Today is a day of somewhat justification of consumer health

and earnings that continue to impress in a way that offer relief

to markets," said Keith Buchanan, senior portfolio manager at

Globalt Investments.

Technology stocks were also buoyed, with the index

on course for another record finish. Its 1% gain was the highest

among the 11 S&P sectors.

U.S. chipmakers edged up after TSMC, the world's

main producer of advanced AI chips, posted a record quarterly

profit, saying demand for artificial intelligence was getting

stronger.

U.S.-listed shares of TSMC gained 3.7%, Marvell ( MRVL )

rose 2.1% and Nvidia ( NVDA ) added 1.1%.

Wall Street also watched Netflix ( NFLX ) ahead of its

quarterly results after the market's close. Its shares were up

1.6%.

On Wednesday, markets whipsawed after reports suggested

Trump was mulling the ouster of Fed Chair Jerome Powell. Though

Trump quickly shot down the reports, his persistent criticism of

the Fed and hints at a possible ouster kept investors jittery.

Meanwhile, attention also remained on looming tariffs, with

an August 1 deadline threatening higher levies for many U.S.

trading partners.