Stocks opened Thursday’s trading session higher after new data showed the US economy contracted for the second quarter in a row in the second quarter.
Shortly after the opening bell, the S&P 500 and Nasdaq were up about 0.3%, while the Dow was up 0.2%.
Commerce Department data released Thursday morning showed GDP growth fell to an annualized rate of 0.9 percent in the second quarter, marking the second quarter in a row that we’ve seen a drop in economic activity.
Thursday’s early move followed strong gains seen on Wednesday after the Federal Reserve offered an expected 75 basis point hike in interest rates and suggested it could slow the pace of its rate hike cycle.
All three major indexes rallied after the US central bank’s announcement. The S&P 500 rose 2.6%, the Dow Jones Industrial Average gained 1.4% and the tech-heavy Nasdaq Composite soared 4.1%.
Thursday’s GDP report is sure to continue the debate among investors over whether the US economy is in recession, with many market participants considering two consecutive quarters of weaker growth to meet a definition of a recession.
White House officials in recent days have been eager to remind the public that recessions are officially called by the NBER, which defines recession as“a significant decline in economic activity that is distributed throughout the economy and that lasts more than a few months.”
Treasury Secretary Janet Yellen will speak to reporters about today’s GDP data at 1:30 PM ET.
Elsewhere on the economic data calendar, the weekly report on initial jobless claims showed a slight moderation in first-time claims for unemployment insurance, with a total of 256,000 last week after 261,000 requests the previous week.
However, jobless claims data have trended modestly upward in recent weeks.
On the earnings side, shares of Meta ( META ) fell more than 5.5% in early trading after Facebook’s parent company reported late Wednesday second-quarter earnings that were below analysts’ estimates. The quarter also marked the social media giant’s first year-over-year revenue decline.
The story continues
The company also cut its spending forecast again, ia call the analysts CEO Mark Zuckerberg said: “It looks like we’ve entered an economic downturn that will have a broad impact on the digital advertising business. It’s always hard to predict how long these cycles will be, but I’d say the situation looks worse.” it’s a quarter past.”
Zuckerberg added: “In this environment, we are focused on making the long-term investments that will position us to be stronger after this recession, including our work on our discovery engine and Reels, our new infrastructure ads and the metaverse. We’re also focused on being rigorous about measuring returns and sizing those investments right.”
Earnings from more Big Tech heavyweights are due Thursday, with Apple ( AAPL ) and Amazon ( AMZN ) on deck to report. Other big names among a busy list of gains for the day include Pfizer (PFE), Comcast (CMCSA), Intel (INTC) and Roku (ROKU).
The logos of Amazon, Apple, Facebook and Google are seen in a composite photo from Reuters files. REUTERS/File Photo
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Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc
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