S&P 500 rallies as third-quarter GDP growth decelerates to 4.9%, but resilient job market indicators boost investor confidence.
The Dow Jones Industrial Average, Nasdaq Composite, and S&P 500 are experiencing a rebound, marking a significant recovery from their worst performance since October. The Dow rose by 0.76%, and the Nasdaq Composite increased by 1.1%. The S&P 500 also gained, rising 0.83% and edging closer to record highs, following a strong rally since late October.
The U.S. economy’s growth showed a deceleration with the third-quarter real GDP increasing by 4.9%, below both the prior 5.2% estimate and the Dow Jones forecast of 5.1%. Meanwhile, initial jobless claims ticked slightly upward to 205,000 last week but remained lower than expected, suggesting resilience in the labor market.
Highlights In corporate news, Micron Technology’s shares surged over 7% post-earnings, while Carnival shares rose by 6% following a smaller-than-expected quarterly loss. Boeing’s stock also lifted by 1.8% amid positive news from China. CarMax shares jumped 7% after beating earnings expectations, and Salesforce was upgraded by Morgan Stanley, projecting a promising outlook for 2024.
Given the recent economic indicators, the stock market’s short-term forecast is bullish. The combination of weakening growth with a strong labor market aligns with the Federal Reserve’s objectives, suggesting an easing of aggressive rate hikes. This development reinforces the anticipation of a potential rate cut in the near future, which could further invigorate market optimism and sustain the current rally.
James Hyerczyk is a U.S. based seasoned technical analyst and educator with over 40 years of experience in market analysis and trading, specializing in chart patterns and price movement. He is the author of two books on technical analysis and has a background in both futures and stock markets.