U.S. stocks rose Thursday as investors mulled over an update from the Federal Reserve on its rate hike plan and a better-than-expected fourth-quarter GDP report.
The Dow Jones Industrial Average added about 315 points, or 1%, in highly volatile trading, after earlier plunging nearly 500 points. The S&P 500 rose 1.1%. The Nasdaq Composite added 1.1%.
Netflix jumped more than 4% on news that Pershing’s Bill Ackman bought 3.1 million shares. Tesla was marginally higher in early morning trading after reporting quarterly earnings.
On the downside, McDonald’s shares fell 2.5% in premarket trading after the fast-food chain’s fourth-quarter earnings missed Wall Street expectations. Intel lost 3% despite a strong earnings report.
Fourth-quarter gross domestic product jumped 6.9% from the year prior, the Bureau of Economic Analysis reported Thursday. Economists surveyed by Dow Jones expected the economy grew at a 5.5% annualized pace in the final three months of 2021.
Thursday morning’s rocky trading comes a day after the Federal Open Market Committee strongly indicated the first interest rate hike since late 2018 could come as soon as March.
Chairman Jerome Powell rattled markets Wednesday saying the Fed has “quite a bit of room” to raise rates before negatively impacting employment.
“Yesterday’s FOMC decision and Powell’s presser was both positive and negative for markets, but in the end, it mostly reinforced what we know: The Fed is serious about raising rates, that’s going to continue to ... keep markets volatile,” Tom Essaye, founder of Sevens Report, said in a note.