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 is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.