US stocks experienced an upward trend on Tuesday, highlighted by the S&P 500 achieving a new record high, as Wall Street reacted positively to new economic data indicating robust growth in the US economy during the summer months. This growth prompted investors to reconsider their expectations for imminent interest rate cuts.
The S&P 500 (^GSPC) climbed 0.5%, closing at an all-time high of 6,909.79. The tech-oriented Nasdaq Composite (^IXIC) increased by 0.6%, while the Dow Jones Industrial Average (^DJI) rose approximately 0.2%. This marks four consecutive days of gains for the major indices.
In commodities, both gold (GC=F) and silver (SI=F) continued their impressive rally, positioning them for potentially their best annual performance in over 40 years. Copper (HG=F) also surged, exceeding the $12,000 per ton mark for the first time in history.
Tuesday’s trading session provided crucial economic insights just ahead of the Christmas holiday. The latest report on third-quarter GDP revealed an impressive 4.3% annualized growth rate, significantly above the anticipated 3.3%. This robust figure points to ongoing economic strength, with consumer spending also remaining resilient over the summer months.
Following the release of the GDP data, traders adjusted their expectations regarding potential interest rate cuts, with the probability of the Federal Reserve maintaining its current rates rising to over 85%, up from 80% the previous day and 75% the week prior. Nevertheless, many still expect two rate cuts by the end of next year.
Conversely, a report from the Conference Board revealed a decline in consumer confidence for the fifth consecutive month, indicating persistent negative sentiment among consumers about the economic outlook.
Wall Street had a notable rebound in recent days, buoyed by last week’s data that included an unexpected decline in inflation and a lukewarm assessment of the labor market, which kept expectations for interest-rate cuts largely intact.
On the corporate side, shares of Novo Nordisk (NVO) saw a significant boost after the Danish pharmaceutical company received official US approval to sell its Wegovy weight-loss medication.
As the trading week comes to a close, US stock markets will have an early finish on Wednesday and will remain closed for the holiday on Thursday. This latest market activity reflects a blend of cautious optimism supported by economic resilience, marking a positive outlook as we approach the new year.