US stocks shrug off weak GDP data, end 1% higher
NEW YORK : Wall Street stocks rallied again yesterday (July 28), shrugging off a weak US gross domestic product (GDP) report that deepened recession talk but generated hopes among investors that the economic slowdown means the Federal Reserve will moderate its aggressive interest rate hikes. The Dow Jones Industrial Average finished 1.0% higher at 32,529.63. The broad-based SP 500 climbed 1.2% to 4,072.43, while the tech-rich Nasdaq Composite Index tacked on 1.1% to 12,162.59. Stocks fell soon after the second-quarter data were released, showing US GDP declined at an annual rate of 0.9%, following an even bigger drop in the first quarter. But markets pivoted later in the morning, betting that clear signs of economic weakness would prompt the Fed to ease off on steep increases in borrowing costs. The US central bank on Wednesday announced its second straight 75 basis point increase, and signalled it is prepared to do more. “The real catalyst … is a belief that bad news (earnings disappointments and weak data) is good news (fewer rate hikes from the Fed),” Briefing.com said in an analysis.
US stocks shrug off weak GDP data, end 1% higher
NEW YORK : Wall Street stocks rallied again yesterday (July 28), shrugging off a weak US gross domestic product (GDP) report that deepened recession talk but generated hopes among investors that the economic slowdown means the Federal Reserve will moderate its aggressive interest rate hikes. The Dow Jones Industrial Average finished 1.0% higher at 32,529.63. The broad-based SP 500 climbed 1.2% to 4,072.43, while the tech-rich Nasdaq Composite Index tacked on 1.1% to 12,162.59. Stocks fell soon after the second-quarter data were released, showing US GDP declined at an annual rate of 0.9%, following an even bigger drop in the first quarter. But markets pivoted later in the morning, betting that clear signs of economic weakness would prompt the Fed to ease off on steep increases in borrowing costs. The US central bank on Wednesday announced its second straight 75 basis point increase, and signalled it is prepared to do more. “The real catalyst … is a belief that bad news (earnings disappointments and weak data) is good news (fewer rate hikes from the Fed),” Briefing.com said in an analysis.