Investing.com-- US stocks edged higher Thursday, rebounding after the previous session's rout as the Federal Reserve indicated a slower pace of easing in 2025, while growth data indicated a resilient economy.
At 09:40 ET (14:40 GMT), the Dow Jones Industrial Average rose 355 points, or 0.8%, the S&P 500 index gained 49 points, or 0.8%, and the NASDAQ Composite climbed 160 points, or 0.8%.
US GDP shows healthy growth
The US economy grew faster than previously estimated in the third quarter, driven by robust consumer spending, according to data released earlier Thursday.
Gross domestic product increased at an upwardly revised 3.1% annualized rate, having been previously reported to have expanded at a 2.8% pace last quarter.
The economy grew at a 3.0% pace in the April-June quarter, and is expanding at a pace that is well above what Federal Reserve officials regard as the non-inflationary growth rate of around 1.8%.
This data plays into the idea that the Federal Reserve will be slow to cut interest rates further next year.
Fed sees only two more cuts in 2025
The US central bank cut interest rates by 25 basis points on Wednesday, as widely expected, but also the policymakers also indicated that they see just two more 25 bps rate cuts next year, compared with a prior forecast in September for four cuts.
The Federal Open Market Committee (FOMC) economic projections showed that inflation was still a long way from its 2% target, with the targeted metric expected to end this year at 2.4% and at 2.5% next year.
The prospect of interest rates remaining higher for longer than expected sent Wall Street indexes sharply lower on Wednesday, with heavy losses in the technology sector.
The blue chip DJIA slumped over 1,000 points, or 2.6%, its 10th consecutive lower session, marking its longest losing streak since 1974, while the S&P
500 dropped almost 3% and the Nasdaq Composite slipped 3.6%, its worst day since late July.
Micron slumps after weak guidance
Micron Technology (NASDAQ:MU) shares plunged 16% after the company issued weaker-than-expected second-quarter guidance.
Elsewhere, Darden Restaurants (NYSE:DRI) stock gained over 13% after the restaurant operator posted fiscal second-quarter results ahead of expectations, with sales rising 6%, while adding upbeat guidance.
CarMax (NYSE:KMX) stock rose 6% after the used car retailer reported third-quarter earnings and revenue that topped analyst expectations, driven by increases in unit sales and strong margins.
Crude mixed as global outlook clouds
The benchmark crude contracts traded in a mixed fashion Thursday, as traders digested different central bank monetary policy outlooks.
By 09:40 ET, the US crude futures (WTI) dropped 0.4% to $70.33 a barrel, while the Brent contract rose 0.3% to $73.63 a barrel.
The US dollar soared in the wake of the Federal Reserve meeting, climbing to an over two-year high, which pressures the crude complex making the commodity more expensive for international buyers.
While the Fed may be pausing its rate-cutting cycle, Swedish Riksbank cut rates earlier Thursday and more policymakers than expected voted for the Bank of England to cut, even as it left them unchanged.
Additionally, official data from the Energy Information Administration on Wednesday showed US crude stocks fell by 934,000 barrels in the week to Dec. 13, compared with expectations for a 1.6 million-barrel draw.
(Ayushman Ojha contributed to this article.)