Markets Lose Momentum
U.S. stocks pulled back Thursday as investors digested a mix of strong economic data and uncertainty about the Federal Reserve’s next move.
- Dow Jones Industrial Average (DJI): -0.4%
- S&P 500 (GSPC): -0.7%
- Nasdaq Composite (IXIC): -0.7%
Big Tech names led the decline, with Oracle (ORCL) extending losses and Tesla (TSLA) sliding around 4%. The pullback marks the second straight day of declines, raising questions about whether the AI-driven rally has run too hot.
Data Signals Stronger Economy
Two key data points pressured markets:
- GDP: U.S. second-quarter GDP grew at an annualized 3.8%, a sharp rebound from the 0.6% contraction in Q1 and well ahead of the 3.3% forecast.
- Jobless claims: Weekly unemployment filings dropped to 218,000 from 232,000, while continuing claims dipped to 1.92M.
On the surface, the numbers confirm a resilient economy. But for investors hoping for two more rate cuts this year, the stronger data could keep the Fed cautious.
Eyes on Inflation Data
The focus now turns to Friday’s release of the Personal Consumption Expenditures (PCE) index, the Fed’s preferred inflation gauge. An easing print could strengthen the case for policy shifts, but signs of division among Fed policymakers are already tempering expectations.
Corporate & Crypto Movers
- Costco (COST): Earnings expected after the bell, with investors watching for sales growth as shoppers hunt bargains in a shaky economy.
- Bitcoin (BTC-USD): Fell below $110,000, down over 3%, while Ethereum (ETH-USD) dropped 5% to under $3,900 before paring losses.
- Solana (SOL-USD) and other cryptos also saw steep declines as ETFs posted net outflows and risk appetite faded.
WSA Take
Wall Street is back in a tug-of-war between fundamentals and Fed expectations. Strong GDP growth and falling jobless claims are positive signs for the economy, but they complicate the case for near-term easing. The Fed’s split tone is now weighing heavier than AI hype, leaving markets vulnerable to inflation data surprises.
For investors, the message is clear: don’t expect a straight line up. Rate cut hopes may keep providing support, but data-driven volatility will dominate the next leg.
If you missed our recent coverage of Tesla’s European sales collapse, it’s another example of how investor narratives can shift fast. For more market-moving insights, visit the Wall Street Access homepage.
Disclaimer
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