Stock market today: S&P 500, Nasdaq, Dow turn higher after surprise GDP growth trims rate-cut bets

U.S. stock markets, including the S&P 500, Nasdaq, and Dow, staged a late-session rebound on Thursday, reversing earlier losses to close higher. This turnaround occurred despite a significant recalibration of interest rate expectations following the release of stronger-than-anticipated fourth-quarter GDP figures. The Commerce Department reported a robust 3.3% annualized growth rate for the final quarter of 2023, significantly exceeding economists' predictions. The surprisingly strong economic data initially sent ripples through the market, as traders interpreted it as a sign that the Federal Reserve might delay or temper its highly anticipated interest rate cuts. This resilience, while positive for the underlying economy, often leads to investor jitters about tighter monetary conditions for longer. However, the market ultimately rallied, suggesting that investors eventually focused on the strength of corporate earnings and the overall health of the economy, overriding immediate concerns about Fed policy. Now, investors are keenly focused on upcoming economic indicators, especially inflation reports. These will be crucial in shaping the Federal Reserve's stance on monetary policy. Any further signs of persistent inflation could lead to continued adjustments in rate-cut forecasts, potentially inducing further market volatility as participants realign their portfolios with the evolving economic outlook. The full implications for investors will depend on follow-through in price action, positioning data and forthcoming policy or earnings catalysts referenced above.