On the evening of December 23, Beijing time, U.S. stocks opened slightly lower on Tuesday. A delayed economic report showed that U.S. third-quarter GDP growth surged to 4.3%, far exceeding expectations.
The Dow Jones Industrial Average fell 65.16 points, or 0.13%, to 48,297.52. The Nasdaq Composite dropped 26.735 points, or 0.11%, to 23,402.094, while the S&P 500 declined 5.11 points, or 0.07%, to 6,873.38.
On Monday, the S&P 500 extended its gains for a third consecutive session, driven by broad advances in tech stocks such as Nvidia, Micron, and Oracle. Ten out of the 11 sectors in the S&P 500 closed higher, with materials and financials leading the gains. Gold miners Newmont and Freeport-McMoRan both jumped 3% as gold and silver futures hit record highs.
The Dow rose about 0.5% on Monday, while the tech-heavy Nasdaq Composite also climbed 0.5%.
Chris Harvey, head of equity and portfolio strategy at CIBC Capital Markets, compared the current AI stock frenzy to the dot-com bubble era, stating, "The market remains quite healthy. Current stock valuations are not excessively high, and we don’t see signs of a bubble like back then. Moreover, the business fundamentals today are much stronger than in the late 1990s."
Harvey noted that unlike the dot-com investment frenzy of the late 1990s, financial stocks have led the recent market rally as investors rotated into cyclical sectors. He also mentioned that JPMorgan Chase has outperformed most tech stocks over the past three to five years.
Trading hours for U.S. stocks will be shortened this week due to holidays. The New York Stock Exchange will close early at 1 p.m. ET on Wednesday and remain closed on Thursday (Christmas Day). Regular trading will resume on Friday.
In economic data released Tuesday, a delayed report showed that the U.S. economy grew much faster than expected in the third quarter, fueled by robust consumer spending. The Commerce Department's preliminary estimate indicated that GDP expanded by 4.3% from July to September, surpassing the 3.2% growth forecast by economists surveyed by Dow Jones.
U.S. durable goods orders fell 2.2% in October compared to the previous month, worse than the estimated 1.5% decline. Economists' forecasts ranged from a 4.5% drop to a 1.0% increase. The Census Bureau reported a 0.7% rise in September. Excluding transportation, new orders edged up 0.2% in October after a 0.7% gain in September. Non-defense capital goods orders excluding aircraft rose 0.5% in October, down from a 1.1% increase in September. Shipments of such goods grew 0.7% in October, compared to 1.2% in September.
The Philadelphia Fed’s non-manufacturing index dropped to -16.8 in December. The bank’s regional business activity index declined to -16.8 from -16.3 the prior month. The overall business activity index fell to 4.3 from 19.8, while new orders dropped to 3.2 from 6.6. The prices paid index rose to 40.3 from 34.7, and full-time employment increased to 9.6 from 2.5. The six-month business outlook index slipped to -13.8 from -13.3.
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