Wall Street rises on mixed economic data, ASX set to dip
Damian Troise
Stocks are nearing records after updates showing the economy grew sharply in the third quarter, but inflation remains high and consumers are losing confidence.
The S&P 500 rose 0.3 percent and is just below the all-time high it set earlier this month. The Dow Jones was up 68 points, or 0.1 percent, in midday trading. The Nasdaq composite rose 0.4 percent. The Australian share market is poised for a decline, with futures pointing to a loss of 14 points, or 0.2 per cent, at the open. The ASX gained 1.1 per cent on Tuesday. The Australian dollar was trading at 66.89¢ at 5.12am AEDT.
The majority of stocks in the S&P 500 were losing value, but some big technology stocks led the market higher. Nvidia rose 2.5 percent and Google’s parent company Alphabet rose 1.4 percent. These are among the few companies with outsized valuations that tend to have more influence on the direction of the broader market.
Novo Nordisk rose 8 percent after U.S. regulators approved a pill version of blockbuster weight-loss drug Wegovy, the first daily oral drug to treat obesity.
Wall Street is getting the latest economic developments during a holiday-shortened, quiet week. Markets in the US will close early on Wednesday for Christmas Eve and remain closed on Thursday for Christmas.
The US economy grew at an annual rate of 4.3 percent in the third quarter. That builds on 3.8 percent growth in the second quarter and marks a sharp turnaround from the first quarter, when the U.S. economy shrank for the first time in three years.
The latest report also showed that persistent inflation continues to impact the economy. The Federal Reserve’s favorite inflation gauge, called the personal consumption expenditures index, or PCE, rose to an annual rate of 2.8 percent last quarter, from 2.1 percent in the second quarter.
The yield on the 10-year Treasury note rose from 4.15 percent to 4.18 percent just before the third-quarter gross domestic product report was released. The yield on the two-year Treasury note, which more closely tracks expectations for the Fed’s actions, rose to 3.54 percent from 3.49 percent just before the report was released.
The Fed is pursuing a more cautious policy approach in the face of mixed signals from the economy. Economic growth is occurring at the same time that inflation remains stubbornly above the central bank’s 2 percent target. The job market is also slowing, adding another layer of concern about whether the central bank will continue to cut interest rates.
On Wednesday, the Labor Department will release weekly data on applications for unemployment benefits, a gauge of layoffs in the United States.
“The Fed is balancing inflation risks against weakening labor markets, and today’s report further complicates its dilemma,” Morningstar Wealth multi-asset strategist Dominic Pappalardo wrote in a note to investors.
The Fed has cut rates three times in 2025, and the central bank’s rate-setting committee is divided on additional rate cuts in 2026. At their last meeting, committee members envisioned a wide range of possibilities, from keeping interest rates steady to two or more cuts.
Wall Street expects the Fed to keep interest rates steady at its January meeting.
Consumer spending and confidence remain weak amid concerns about higher prices, especially with a wide-ranging U.S. trade war that could further raise prices for many goods.
The latest update from business group The Conference Board showed consumer confidence fell in December to its lowest level since tariffs were introduced in April. Meanwhile, retail sales are weakening and consumers are becoming more cautious.
Consumers have become more targeted with their purchases during the holiday shopping season, according to Visa’s Consulting and Analytics division. From Nov. 1 through Sunday, cash and credit card sales increased 4.2 percent; This is less than the 4.8 percent increase in the same period the previous year.
Markets in Asia and Europe were mixed.
Gold price continued its rise. It rose 0.6 percent on Tuesday and is up nearly 70 percent for the year.
Oil prices were relatively stable after rising the day before. While the US benchmark crude oil increased by 0.2 percent, the price of Brent crude oil, the international standard, increased by 0.1 percent.
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