The S&P 500 clinched a fresh record close Tuesday, underpinned by an Nvidia-led climb in big tech, and optimism over the U.S. economy following stronger-than-expected third-quarter economic growth.
At 4:00 p.m. ET (21:00 GMT), the S&P 500 was up 0.5% to a record close of 6,909.79, while Nasdaq 100 added 0.6%, and the Dow Jones Industrial Average traded 0.2%, or 79 points, higher.
Get premium stock market insight and AI stock picks by upgrading to InvestingPro Strong Q3 GDP data; Nvidia leads tech higher The Q3 GDP rose at a 4.3% annual rate in the third quarter after growing 3.8% in the prior three-month period, and easily above the 3.3% consensus.
"Equities sold off on the solid GDP print and jump in consumer spending as bets on rate cuts for 2026 also pared a touch. While the data is very lagged, the resilience of American buyers poses an upside risk to the dovish expectations into next year that stocks have baked in," Tatiana Darie, a macro markets strategist at Bloomberg, said.
The underlying move in bond markets show little bets
The U.S. economy expanded at a stronger-than-expected pace in the third quarter, according to a government report released after a prolonged delay caused by the federal shutdown.
Gross domestic product rose at a seasonally adjusted annual rate of 4.3% in the July–September period, the Commerce Department said, accelerating from 3.8% growth in the prior quarter. The reading exceeded the 3.2% consensus forecast from economists surveyed by The Wall Street Journal.
3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads. The report represents the first official estimate of third-quarter economic growth, even as the fourth quarter is already nearing its end. Like other federal agencies, the Commerce Department has been working through a backlog of data following the government shutdown, which pushed the GDP release back by nearly two months.
Elsewhere of AI stocks including NVIDIA Corporation (NASDAQ:NVDA) rose 3% to help push the broader tech sector higher, with Apple Inc (NASDAQ:AAPL), Alphabet Inc Class A (NASDAQ:GOOGL) and Microsoft Corporation (NASDAQ:MSFT) also slightly higher.
Fed cut bets, chair replacement in focus Ali Jaffery from CIBC Economics thinks the report won’t move the needle for the U.S. Federal Reserve.
"Besides being a bit dated, the Fed prioritizes the job market over activity data as a leading indicator of where the economy is headed, and the labor market has moved further in the wrong direction in fourth quarter, albeit with more limited data," he wrote.
Jaffery reiterated his call for two more rate cuts next year in the first half of the year.
Support for equities came from last week’s U.S. consumer price data, which surprised on the downside and reinforced expectations that inflation pressures are cooling more decisively.
The softer CPI reading prompted traders to bring forward bets on interest rate cuts, with markets now pricing in a greater chance of swifter easing by the Federal Reserve in 2026.
Investors were also watching developments around the Fed’s leadership transition for fresh clues on the policy outlook.
