Investing.com-- U.S. stocks rose Thursday as stronger than expected growth data allayed fears of a severe slowdown in the American economy.
At 09:40 ET (13:40 GMT), Dow Jones Industrial Average rose 100 points, or 0.2%, S&P 500 gained 17 points, or 0.3%, and NASDAQ Composite climbed 135 points, or 0.8%.
GDP growth eases hard landing fears
Gross domestic product grew by 3% in the last quarter, a Commerce Department report showed in its second estimate, better than expectations of a 2.8% growth and a jump from the 1.4% annualized growth seen in the first three months of the year.
Additionally, a Labor Department report showed initial claims for unemployment benefits for the week ending Aug. 24 stood at 231,000, marginally lower than estimates of 232,000 as per economists polled by Reuters.
Growing expectations of an interest rate cut in September have buoyed Wall Street indexes in recent sessions, with Federal Reserve chair Jerome Powell laying the foundations for a reduction at the Jackson Hole symposium last week.
“The time has come for policy to adjust,” the central bank leader said in his much-awaited keynote address. “The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks.”
Nvidia dips on soft outlook
This healthy economic data has allowed Wall Street to look past Nvidia's (NASDAQ:NVDA) losses, after the chipmaker disappointed with its guidance despite stronger-than-expected profit for the May-July quarter as well as a $50 billion share buyback.
“Nvidia blew past estimates with record top and bottom lines, driven by strong demand for its AI infrastructure and executives forecast new record sales this quarter. However, the nearly 80% y/y projected expansion means further deceleration and a notable departure from the recent triple-digit growth rates," said Nikos Tzabouras, Senior Financial Editorial Writer at Tradu.
Nvidia was sitting on a 150% valuation spike this year on the back of hype over AI, making it vulnerable to a heavy degree of profit-taking that had battered the broader tech sector. Its shares fell just over 1% Thursday.
More corporate earnings in focus
There have also been a number of notable consumer names that have delivered results Thursday.
Dollar General (NYSE:DG) stock slumped 24% after the discount retailer cut its annual same-store sales forecast, with customers cutting back spending on its higher-margin goods.
Salesforce (NYSE:CRM) stock rose 2% after the business software maker reported robust fiscal second-quarter results that beat estimates and raised its full-year profit outlook.
CrowdStrike (NASDAQ:CRWD) stock rose 7% on the back of better-than-expected second-quarter results, even after the cybersecurity firm cut its revenue and profit forecasts in the aftermath of last month's global outage.
Crude gains after losing sessions
Crude prices rose Thursday after two losing sessions, boosted by the stronger than expected U.S. growth data.
By 09:40 ET, the U.S. crude futures (WTI) traded 2.6% higher to $76.42 a barrel, while the Brent contract rose 2.1% to $79.20 a barrel.
Crude markets were nursing two straight days of losses, reversing a recent rebound amid persistent concerns that slowing growth in the U.S. and China will dent demand in the coming months.
Production disruptions in Libya, a member of the Organization of the Petroleum Exporting Countries, kept traders attaching some risk premium to crude, as did signs of a sustained conflict in the Middle East.
(Ambar Warrick contributed to this article.)