Shares extended gains on Wall Street on Thursday after shedding an early decline. After a report that The US economy is already in recession or on its way.
Indicator Dow Jones It rose 1% to 32,523.70 points. The Standard & Poor’s 500 And closed up 1.2% to 4071.99 points, while closing Nasdaq CompositeTech-rich shares rose 1.1 percent to 12,162.61 points.
Indicators fell in the early hours after the Commerce Department reported that the economy contracted from April to June at an annual rate of 0.9 percent.. The recent drop in GDP – the broader measure of the economy – followed an annual decline in 1.6% between January and March. Consecutive quarters of lower GDP are an unofficial, if not definitive, indicator of stagnation.
The fourth-quarter GDP report indicated weakness across the economy. Consumer spending slowed as Americans bought fewer goods. Business investment declined. Inventories fell as companies slowed to restock shelves, hurting two percentage points of gross domestic product.
The Federal Reserve has slowed down in US economic growth, in order to control the largest inflation Of the past 40 years, his goal is to raise interest rates one last time on Wednesday. The latest GDP report, along with other weak data recently, may give some investors confidence that the central bank will not have to be aggressive in raising interest rates in the coming months.
‘Bad news is sometimes good’said Megan Hornman, chief investment officer at Verdence Capital Advisors.
The Fed raised the key short-term interest rate in 0.75 percentage point On Wednesday, it brought it to its highest level since 2018. The move sparked a broad market recovery led by technology stocks that helped give Nasdaq its biggest gain in more than two years. All major indexes are now on track for weekly gains, extending the strong rally on Wall Street in July.
In a busy week with corporate earnings reports, lInvestors focused on what companies are saying about inflation and the impact of higher interest rates on their businesses and customers.
Dim the markets Monday After the retail giant Walmart It warned that its profits are being hurt by rising food and gasoline prices, forcing shoppers to cut back on more profitable discretionary items such as clothing.
Bond yields fell across the board. The two-year Treasury yield, which tends to move according to the Fed’s forecast, fell to 2.88% from 2.98% on Wednesday. The 10-year yield, which affects mortgage rates, fell to 2.69% from 2.74%.
(With information from AP and AFP)