Market Rebound: Stocks Bounce Back After Fed-Induced Sell-Off
After a tumultuous day on Wall Street, US stocks staged a remarkable comeback on Thursday, shaking off the previous day’s losses sparked by the Federal Reserve’s hawkish stance on interest rates. The Dow Jones Industrial Average (^DJI) led the charge, surging over 1% to break its 10-day losing streak. The S&P 500 (^GSPC) and Nasdaq Composite (^IXIC) followed suit, rising around 1% each.
Fed’s Hawkish Cut Sparks Market Reaction
The Fed’s decision to scale back the number of rate cuts it expects next year to two, coupled with Chair Jerome Powell’s comments suggesting even Wednesday’s quarter-point rate cut was a “closer call,” sent shockwaves through the market. Investors interpreted the move as a “hawkish cut,” prompting a sharp sell-off that sent the S&P 500 and Nasdaq to their worst days since the summer.
Economic Data Provides Boost
However, a slew of positive economic data released on Thursday helped to offset the Fed’s hawkish tone. The third estimate for third-quarter US GDP showed the economy grew at an annualized rate of 3.1%, surpassing the previous reading of 2.8%. Additionally, weekly unemployment claims fell to 220,000, a decrease from the previous week’s 242,000.
Sectors Rally Across the Board
All eleven sectors of the S&P 500 were in the green, with Financials (XLF) leading the charge with a 1.6% surge. The Dow Jones Industrial Average (^DJI) also rose over 0.8%, while the S&P 500 (^GSPC) and Nasdaq Composite (^IXIC) rallied more than 1%.
Earnings and Economic Data Roundup
In other news, Accenture (ACN) stock rose after beating quarterly revenue estimates. Meanwhile, economic data releases included the Philadelphia business outlook, leading index, and existing home sales. Earnings reports from BlackBerry (BB), CarMax (KMX), Conagra (CAG), Darden Restaurants (DRI), FactSet (FDS), FedEx (FDX), Lamb Weston (LW), and Nike (NKE) also made headlines.
Overnight News You May Have Missed
Catch up on the latest news that broke overnight and early this morning, including Robinhood’s profit surge, Powell’s inflation comments, Micron’s sales outlook, and more.
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