Aggregate spending has been strong, even if American shoppers are getting choosier about what they buy
Visa's stock is up 8.5% so far this year.
Visa and Mastercard shares notched their first record closes in more than a year, helping to paint a picture of sturdy consumer spending despite an array of pressures on American shoppers.
Shares of Visa (V), which investors view as a gauge of consumer spending, finished 3.1% higher on Monday to close at $382.41 - a new high. The gains made for the stock's first record finish since June 11, 2025, when it closed at $373.31, according to Dow Jones Market Data.
Mastercard's stock $(MA)$ increased 3.3% on Monday to seal a new all-time high of $599.86. This was the stock's first finish in record territory since Aug. 22, 2025, when it ended the day at $598.96.
"There's clearly some argument that can be made that it's a K-shaped economy right now, but at the same time what we've seen from Visa's results in the first half reflects strong, resilient consumer spending in aggregate here in the U.S.," Seaport Research Partners analyst Jeff Cantwell told MarketWatch over email.
The ascent for Visa's stock follows a dip through March, on worries about a possible interest-rate cap on credit cards proposed by President Donald Trump earlier this year, Cantwell said. The Iran war also weighed on the stock.
But Cantwell said Visa's past two quarters were some of its strongest in years, driving a rebound through the summer. Efforts to expand into agentic AI and services that help cardholders manage subscriptions have also helped.
"Their value-added services are increasingly contributing to their results and are driving a lot of the outperformance," Cantwell said.
Shares of several other companies that are sometimes used to measure consumer sentiment - including travel platform Expedia (EXPE) and drink-maker Coca-Cola $(KO)$ - also reached new highs on Monday. U.S. stocks largely closed lower on the day. Oil prices also fell.
The narrative around consumer spending has been somewhat nuanced. Walmart shares $(WMT)$ sold off sharply last week following the chain's quarterly results. Bryan Hayes, a strategist at Zacks Investment Research, told MarketWatch then that the market had concluded that consumer spending "is roughly as good as it gets for now."
But he also noted that consumers weren't necessarily weak. Instead, they were just being deliberate about what they'd buy.
During Visa's earnings call last month, Chief Financial Officer Christopher Suh said that the consumer backdrop remained strong.
"We're seeing improvements around credit and debit, discretionary spend, non-discretionary spend, card-present, card-not-present, and across the spend bands as well," he said.
Visa "didn't see any signs of weakening across the lower parts of the spend band either," Suh said.
Keefe, Bruyette & Woods analyst Sanjay Sakhrani said in July that Visa's results showed underlying consumer trends were solid, helped in part by the World Cup. U.S. payment volumes grew 10% in Visa's latest quarter.
However, he noted, volume growth through July 21 was up 9%, a slowdown from June, due to fuel-cost fluctuations and the timing of big summer-deal events. Amazon's Prime Day, for instance, ran from June 23 to June 26. The same day Visa reported quarterly results, the company also said it was cutting some staff on its technology and product teams.
Mizuho analyst Dan Dolev told MarketWatch that while inflation doesn't exactly help consumers, more expensive purchases actually mean a bigger cut for Visa and Mastercard.
"Inflation is great for Visa and Mastercard, because they're a take-rate business," he said, referring to the fact that the companies get a cut of transaction value.
-Bill Peters