On Thursday, U.S. stock markets showed mixed reactions, hovering without a clear direction as investors processed new economic data. The Dow Jones Industrial Average slightly gained by 24 points (0.1%), the S&P 500 also increased by 0.1%, while the NASDAQ Composite dipped by 0.2%. This occurred amidst anticipation of inflation data and the upcoming long weekend.
The U.S. economy exhibited stronger growth in the last quarter of the year than initially estimated, with the gross domestic product (GDP) growing at an annualized rate of 3.4%, revised from the earlier estimate of 3.2%. This adjustment was due to increased consumer spending, higher nonresidential fixed investment, and state and local government expenditure, supported by a robust labor market. In addition, unemployment claims decreased, with a reported 210,000 new claims for the week ending March 23, showing a drop of 2,000 from the previous period.
Despite this positive economic performance, investor sentiment was tempered following comments from Federal Reserve Governor Christopher Waller. At a New York Economic Club event, Waller indicated that immediate interest rate cuts were unnecessary, pointing to recent high inflation figures. He mentioned that the Fed might reduce rates later in the year but emphasized the current economic strength as a reason to maintain higher rates for now. These remarks offered a contrast to the Fed’s previously softer stance, suggesting around 75 basis points of rate cuts in 2024.
Investor focus is now on the upcoming release of the core personal consumption expenditures price index, a key inflation measure watched by the Fed, coinciding with a market closure for Good Friday. This data, along with speeches from Fed Chair Jerome Powell and FOMC member Mary Daly, is eagerly awaited for insights into future interest rate decisions.
In corporate news, RH experienced a stock surge of 16% following positive reception to its new product catalog, despite missing fourth-quarter expectations due to external challenges. Walgreens Boots Alliance also saw a share price increase after reporting sales above forecasts, although it adjusted its earnings outlook due to a tough retail environment in the U.S. Meanwhile, Take-Two Interactive announced an acquisition of Gearbox Entertainment for $460 million, and Home Depot revealed a significant purchase of SRS Distribution for $18.25 billion, aiming to enhance its professional customer base.
In the cryptocurrency sector, Sam Bankman-Fried, the founder of the FTX exchange, was sentenced to 25 years in prison for an $8 billion customer fund embezzlement, amid signs of recovery in the cryptocurrency market.