Broad Gains on Economic Optimism… S&P 500 Hits Record High [New York Market Briefing]

The three major U.S. stock indexes rose together on strong growth in the U.S. third-quarter gross domestic product (GDP).

On the 23rd (local time) at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average closed at 48,442.41, up 79.73 points (0.16%) from the previous close. The Standard & Poor's (S&P) 500 index closed at 6,909.79, up 31.30 points (0.46%), and the tech-heavy Nasdaq Composite closed at 23,561.84, up 133.02 points (0.57%). The S&P 500 rose for a fourth consecutive trading day, marking the 38th record close of the year.

The rise on the day was driven by the U.S. third-quarter GDP growth rate. The U.S. Commerce Department said the U.S. GDP grew 4.3% in the third quarter (annualized quarter-on-quarter). This is the highest quarterly growth rate in two years since the third quarter of 2023 (4.7%). It also significantly exceeded the 3.2% growth forecast compiled by Dow Jones.

As the stronger-than-expected growth persisted, expectations for additional Federal Reserve rate cuts weakened somewhat, and the market opened slightly lower. However, optimism about corporate earnings gained prominence on forecasts that the U.S. economy would continue solid growth next year supported by resilient consumer spending, and the market turned higher.

U.S. President Donald Trump wrote on the social networking service (SNS) Truth Social that "I want a new Fed chair to cut rates when the market is doing well," adding, "I don't want the market destroyed for no reason."

According to the CME's FedWatch, the rate futures market raised the probability that the Fed will cut rates once or keep them unchanged through December next year from 26% the day before to 31% on the day, but it still reflected the highest probability (33%) for two cuts (a total of 0.50% points).

Reporter Goh Kyung-sam, Hankyung.com jsk@hankyung.com