U.S. stocks rose on Thursday after stronger-than-expected growth data eased concerns about a sharp slowdown in the U.S. economy.
At 09:40 ET (13:40 GMT), the S&P 500 was up about 100 points, or 0.2%, gaining 17 points, or 0.3%, and up 135 points, or 0.8%.
GDP growth eases hard landing fears
The Commerce Department reported in its second estimate that U.S. gross domestic product grew 3% in the fourth quarter, better than expectations for 2.8% growth and up from the 1.4% annualized growth seen in the first three months of the year.
Additionally, a report from the Labor Department showed that initial jobless claims for the week ended Aug. 24 were 231,000, slightly below the 232,000 estimate from economists polled by Reuters.
Growing expectations of a September rate cut have supported Wall Street indices in recent sessions, with Federal Reserve Chairman Jerome Powell laying the groundwork for a rate cut at his Jackson Hole symposium last week.
“The time has come to adjust policy,” the central bank chief said in his long-awaited keynote address. “The direction is clear, and the timing and pace of rate cuts will depend on incoming data, evolving expectations, and the balance of risks.”
Nvidia shares fall on weak outlook
The healthy economic data allowed Wall Street to look beyond Nvidia Corp.’s (NASDAQ:NVD) losses, after the chipmaker missed guidance despite stronger-than-expected earnings for the May-July quarter and a $50 billion share buyback.
“Nvidia beat expectations with record earnings and revenue, driven by strong demand for AI infrastructure, and executives forecast new sales records this quarter. However, the expected expansion of nearly 80% year-over-year means further slowdown and a significant departure from recent triple-digit growth rates,” said Nikos Tzabouras, senior financial editor at Trado.
Nvidia has surged 150% this year on the back of the AI hype, making it vulnerable to a lot of profit-taking that has hurt the broader tech sector. Its shares fell more than 1% on Thursday.
More focus on corporate profits
There were also a number of notable consumer names that posted results on Thursday.
Dollar General (NYSE:DG) shares fell 24% after the discount retailer cut its annual same-store sales forecast, as customers cut spending on higher-margin items.
Salesforce (NYSE:) stock rose 2% after the business software maker reported strong second-quarter financial results that beat estimates and raised its full-year earnings outlook.
CrowdStrike (NASDAQ:) stock rose 7% on better-than-expected second-quarter results, even after the cybersecurity company lowered revenue and profit forecasts in the wake of last month’s global outage.
Crude gains after losing sessions
Crude oil prices rose on Thursday after two sessions of losses, supported by stronger-than-expected U.S. growth data.
By 09:40 ET, U.S. crude futures (WTI) were up 2.6% at $76.42 a barrel, while Brent crude was up 2.1% at $79.20 a barrel.
Crude oil markets suffered two straight days of losses, reversing their recent recovery amid ongoing concerns that slowing growth in the United States and China will weigh on demand in the coming months.
Production disruptions in OPEC member Libya have kept traders believing crude prices will rise somewhat due to a risk premium, along with signs of continued conflict in the Middle East.
(Ambar Warrick contributed to this article.)
Comments are closed, but trackbacks and pingbacks are open.