Stocks are little changed after strong GDP report dampens outlook for Fed rate cuts: Live updates
Traders work on the floor of the New York Stock Exchange (NYSE) in New York, US, on Monday, Dec. 22, 2025.
Michael Nagle | Bloomberg | Getty Images
Stocks wavered on Tuesday after delayed economic data came in well above expectations, as investors grappled with what the report could mean for the Federal Reserve’s interest rate outlook.
The Dow Jones Industrial Average traded 53 points lower, or 0.1%. The S&P 500 and Nasdaq Composite traded around the flatline.
The Commerce Department reported that the U.S. economy expanded at 4.3% pace in the third quarter, much better than the 3.2% estimate that economists polled by Dow Jones had forecast.
The report — which was postponed from its initially planned release date of Oct. 30 because of the record-breaking U.S. government shutdown – might have spooked investors into believing an interest rate cut from the Federal Reserve in early 2026 is less likely.
Despite fed funds futures traders increasing their bets slightly following the report that the central bank would hold rates steady at its January and March meetings, they were still largely pricing in two rate cuts by the end of next year, the CME FedWatch Tool showed.
The S&P 500 is coming off of its third winning session, boosted by a 1.5% jump in chipmaking giant Nvidia and advances in Micron and Oracle. Ten out of 11 sectors saw gains in the session. Materials and financials were the top performing sectors, with Newmont and Freeport-McMoRan jumping 3% as gold and silver futures hit records.
The 30-stock Dow advanced about 228 points, or 0.5%, while the tech-heavy Nasdaq Composite climbed 0.5%.
“This market is still rather healthy. Valuations are not high enough at this level. We don’t see the frothiness that we saw back then, and the commercial aspect is so much better now than it was in the late ’90s,” Chris Harvey, head of equity and portfolio strategy at CIBC Capital Markets said on CNBC’s “Closing Bell,” comparing the hype around AI stocks to the froth of the dot-com bubble.
Harvey noted that unlike the internet investment craze of the late 1990s, financials have led the market higher in recent weeks as investors have rotated into cyclical areas of the market. JPMorgan Chase shares have also outperformed a sizable portion of tech names over the past three and five years, Harvey pointed out.
The New York Stock Exchange will close early on Wednesday at 1 p.m. ET on Christmas Eve and will be closed Thursday for Christmas Day.
