Wall Street Closes Higher, Hits New Record on Strong U.S. Economic Data
The U.S. economy grew 3.3% in the second quarter, above expectations for 3%. Real consumer spending rose 1.6% during the period.
Quick overview
- U.S. stocks reached new all-time highs on August 28, with the S&P 500 and Dow Jones both advancing.
- Stronger-than-expected economic growth and positive earnings reports contributed to investor optimism, alongside expectations of a Federal Reserve rate cut.
- Nvidia's quarterly results exceeded estimates, but concerns over its valuation and China outlook led to a slight decline in its stock.
- The U.S. economy grew 3.3% in the second quarter, with consumer spending and jobless claims indicating continued economic strength.
U.S. stocks advanced on Thursday, August 28, with both the S&P 500 and the Dow Jones Industrial Average closing at new all-time highs.
Investors cheered stronger-than-expected economic growth and largely positive second-quarter earnings, alongside rising expectations of a Federal Reserve rate cut in September.
The Dow Jones rose 0.2% to 45,636.90, the S&P 500 gained 0.3% to 6,502.45, and the Nasdaq Composite climbed 0.5% to 21,705.16. All three benchmarks remain on track to post monthly gains.
Nvidia in Focus
Nvidia (-0.8%) reported quarterly results late Wednesday that topped Wall Street estimates and projected stronger-than-expected third-quarter revenue. However, softer-than-anticipated data center revenue and uncertainty over its China outlook led investors to question the stock’s lofty valuation, pulling shares lower. Nvidia also disclosed it made no H2O chip sales to China last quarter and did not include such shipments in its forward guidance.
Chipmakers broadly saw mixed moves, with Taiwan Semiconductor Manufacturing Co. falling 0.4% while Broadcom advanced 2.8%. Elsewhere in tech, cybersecurity firm CrowdStrike rose 4.6% despite cautious guidance, while data-cloud company Snowflake surged more than 20% after raising its annual product revenue forecast.
U.S. GDP Surprises to the Upside
The U.S. economy grew 3.3% in the second quarter, above expectations for 3%. Real consumer spending rose 1.6% during the period. Meanwhile, weekly jobless claims underscored continued labor market strength, with new claims down 5,000 from the prior week and continuing claims falling by 7,000.
U.S. equities extended gains on the back of resilient economic data, a solid earnings season, and increasing confidence that the Fed could move to cut rates as early as September.
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