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U.S. stocks are rising after stronger-than-expected GDP report, Meta earnings

AuthorLiz Moyer
Published 07/27/2023, 10:05 AM
Updated 07/27/2023, 11:04 AM
© Reuters.

Investing.com -- U.S. stocks were rising after a stronger-than-expected report on economic output for the second quarter put the Dow on a path for the best winning streak in decades.

At 10:55 ET (14:55 GMT), the Dow Jones Industrial Average was up 63 points or 0.2%, while the S&P 500 was up 0.6% and the NASDAQ Composite was up 1.1%.

Meta Platforms boosts tech stocks

Tech stocks are getting a boost from hopes the Federal Reserve has reached the end of its interest rate increases. Meta Platforms Inc (NASDAQ:META) stock was surging 6.9% after a strong forecast for earnings as the social media platform operator focuses on efficiency and builds out artificial intelligence-driven capabilities.

That outlook came on the heels of a strong earnings report from Google-parent Alphabet (NASDAQ:GOOGL) (NASDAQ:GOOG), which also showed that digital advertising is in a rebound.

Tech stocks have rallied nearly 35% this year, and the Dow is on track for a 14-day winning streak after notching its longest rally since mid-1987 on Wednesday.

Fed's Powell wouldn't rule out another rate hike

The Fed raised interest rates by another quarter of a percentage point on Wednesday, as expected, and Chair Jerome Powell wouldn’t rule out another rate hike this year, perhaps as early as September. But Powell repeated the Fed’s stand that its decisions would be driven by data, and recent economic reports show signs that inflation is cooling.

Powell suggested on Wednesday that the economy is growing at a slightly better “moderate” pace, an upgrade from “modest,” adding that the Fed no longer forecasts a recession. Gross domestic product for the second quarter rose 2.4% from the prior quarter, better than expected.

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While Powell says the Fed’s work to fight inflation and push it back to its 2% annual target rate, is still not done, market watchers are warming to the idea that the rate-hiking is over. Futures traders see a greater than 50% probability rates will stay at the new current level this year, while some see about a 30% probability of one more increase.

Travel stocks in focus

In other stock movers, online auction site eBay Inc (NASDAQ:EBAY) forecast disappointing third-quarter profit, sending its stock down 8.6%.

Royal Caribbean Cruises Ltd (NYSE:RCL) shares rose 8.7% after the cruise operation raised its forecast for annual profit, while fellow travel stock Southwest Airlines Company (NYSE:LUV) fell 9.5% after it warned of higher labor costs.

Latest comments

Waaa waaaaaaaa….
Oooops
"Lowest $VIX futures monthly RSI since 2011 even surpassing the low vol year of 2017."...best of luck to this buying the bubble
If the market returned to P/E levels from just 10 years ago, the market would shed nearly 10 trillion of value and half the market value would evaporate.
Market goes up for two weeks straight on terrible earnings and news, then higher than expected GDP and market dumps. This is how an unhealthy fake economy works. Valuations driven entirely by how much money Fed is printing. MSFT P/E went from 11 just 10 years ago to nearly 40 now. There will be nothing to save the market when it collapses this time. You can only print money for so longer before the ponzi implodes, especially since we now have a housing bubble with 8% mortgage rates.
Of course, nothing is ever "priced in" to the biggest investment JOKE in the world.  Each "beat" the criminally rigged, low-ball "estimate" results in a "rally," as the entirety of US stock reach the most overvalued valuations in history.  A flagrant intercept of the move lower means the DOW will match it's laughable record of a string of criminally manufactured "gains."  Can't make this stuff up folks.  Wall Street continues to criminally dismantle the US working class in broad daylight.
Pricing-in is continuously happening, more so for newer news.  Your binary thinking is a failure.
Fed QE ( the loan desk is QE if you take away the word “loan”) is the reason for GDP, but even then its fake growth on top of fake growth
Even with interest rates through the roof and mortgage rates over 7%, inflation is still above target. There has been around 20% cumulative inflation since Biden took office. Of course it is lower than last year, last year inflation was 8%, the highest in half a century. Prices are still going up. There was more inflation just last year alone under Biden than all 4 years under Trump combined. Now they are also going to state that banks have to hold an additional 16% of capital because there was more money lost in bank crashes so far in 2023 than the total amount lost during the 2008 crisis.
Inflation was purly caused by the Fed. QE is in full swing ( the Fed calls it the “loan desk” ) . FDIC well underwater, when the loans all fail and the banks fokd, FDIC depositors will have no collateral to sell and become whole again… The new QE is on the backs of FDIC
 Nice attempt at gaslighting. Biden spent over a trillion dollars right after taking office. Inflation went up during his second year in office compared to his first even after fed raised interest rates massively.
The launch of Apollo Ponzi at 11AM cements the laughingstock of the investing worlds position as the greatest financial FRAUD in world history.
I guess it's time to go all in!
It’s misleading information and totally wrong. Sp500 and dow and gold are droping while Dxy skyrocketing
Where is the "usd currency high is making oil price low? LOL.
If it was an asp, Ndrew, you'd be dead by now.
Do stock valuations matter anymore? Does the yield curve inversion matter anymore?
yield inversion historically results in a recession an average of 20 months after the inversion. that happened in 2022 (April I believe). that would put a recession at or near the end of 2023
Headline tomorrow: "Market sees greatest drop since great depression as rate hike fears return"
you ain't kidding. plus Pioneer confirming to watch your positions over the weekend 'merica!
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