US stocks rebounded on Thursday from the previous day’s sell-off that was fueled by a hawkish outlook from the Federal Reserve on its path for interest rates.
The Dow Jones Industrial Average (^DJI) was up more than 1%, after 10-straight losing sessions. Meanwhile, the S&P 500 (^GSPC) rose about 1%, and tech-heavy Nasdaq Composite (^IXIC) rallied more than 1%.
Markets are bouncing back after a harsh reaction the day before, prompted by the Fed scaling back the number of rate cuts it expects next year to two, and Chair Jerome Powell said even Wednesday’s decision — cutting rates by a quarter point — was a “closer call.”
Markets interpreted the Fed’s moves as a “hawkish cut” and reacted accordingly, sending the S&P 500 and Nasdaq to their worst days since the summer.
Meanwhile, the blue-chip Dow is in the midst of its longest losing streak in 50 years and looking to break out of that funk on Thursday. The Dow is still up over 12% this year.
On the economic front, the third estimate for third quarter US GDP showed the economy grew at annualized rate of 3.1%, above the previous reading of 2.8%. Other data out Thursday morning showed 220,000 weekly unemployment claims were filed in the week ending Dec. 14, a decrease from the 242,000 seen the week prior.
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