US economic growth accelerates in Q3
Growth stocks outperform value
ServiceNow dips after deal to buy Armis
(Updates to US market close)
By Chuck Mikolajczak
NEW YORK, Dec 23 (Reuters) -
U.S. stocks rose on Tuesday and the S&amp;P 500 notched a closing record after a flurry of economic data that included a reading of economic growth pushed bond yields higher and elevated growth names.
The Commerce Department said gross domestic product increased at a 4.3% annualized rate in the third quarter, the fastest pace since the third quarter of 2023 and well above the 3.3% estimate of economists polled by Reuters, fueled by robust consumer spending.
While the data was delayed due to the 43-day government shutdown and many analysts expected the fourth quarter would show a slower pace of economic growth, markets are now pricing in a smaller chance of a January rate cut from the Federal Reserve, according to CME’s FedWatch Tool, and shorter-dated bond yields rose.
“The bond market didn’t like this news,” said Stephen Massocca, senior vice president at Wedbush Securities in San Francisco.
“It seems to me that when we lose this battle, growth does well, and growth’s doing well today… but if you’re a food company, or you’re a chemical company, or you’re an oil and gas company, or even if you’re like a private credit company, that’s bad news. Unless interest rates go down, it’s bad.”
According to preliminary data, the S&amp;P 500 (.SPX) gained 31.24 points, or 0.45%, to end at 6,909.73 points, while the Nasdaq Composite (.IXIC) gained 133.02 points, or 0.57%, to 23,561.84. The Dow Jones Industrial Average (.DJI) rose 79.33 points, or 0.16%, to 48,442.01.
The S&amp;P 500 growth index (.IGX) gained nearly 1% while the value index (.IVX) was largely unchanged. AI-related names added to recent gains, rebounding from last week’s selloff that was triggered by concerns about inflated valuations and worries that high capital spending by AI companies would pressure their profits.
Nvidia (NVDA.O) rose as the biggest boost to the benchmark S&amp;P 500 index, while Amazon.com (AMZN.O) , Alphabet (GOOGL.O) and Broadcom (AVGO.O) each saw gains of more than 1% on the day. Other economic data painted a less rosy image of the economy as U.S. consumer confidence weakened in December amid deepening anxiety over jobs and income. Factory production was unchanged in November after declining in October.
All three main indexes were poised for a third straight yearly gain. The S&amp;P 500 and the Dow were also on track to rise for an eighth consecutive month.
Recent gains in U.S. stocks have spurred hopes of a “Santa Claus rally”, a seasonal phenomenon where the S&amp;P 500 posts gains in the last five trading days of the year and the first two in January, according to Stock Trader’s Almanac.
This year, that period begins on Wednesday and runs through January 5.
Trading volumes were light and likely to thin out further as the holiday approaches. U.S. stock markets will close at 1 p.m. ET (1800 GMT) on Wednesday and remain shut on Thursday for Christmas.
ServiceNow (NOW.N) declined after the enterprise software maker agreed to buy cybersecurity startup Armis for $7.75 billion in cash.
U.S. military shipbuilder Huntington Ingalls (HII.N) edged up after President Donald Trump announced plans for a new “Trump class” of battleships, which he said would be larger, faster and “100 times more powerful” than any previously built.
Miner Freeport-McMoRan (FCX.N) climbed after hitting a 15-month high of $52.29 as copper prices touched a record high and Wells Fargo raised its price target on the stock.
Big Tech, AI-related shares lead the way for US stocks this year
<img src="https://imageproxy.pbkrs.com/https://reut.rs/4sc7v8g?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" width="1420" height="764" original-src="https://imageproxy.pbkrs.com/https://reut.rs/4sc7v8g"/>
US gross domestic product
<img src="https://imageproxy.pbkrs.com/https://www.reuters.com/graphics/AUTOMATED-202509/US-ADVANCE-GDP-10Y/zjvqdodgkpx/chart_eikon.jpg?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" width="1420" height="978" original-src="https://imageproxy.pbkrs.com/https://www.reuters.com/graphics/AUTOMATED-202509/US-ADVANCE-GDP-10Y/zjvqdodgkpx/chart_eikon.jpg"/>
US consumer confidence
<img src="https://imageproxy.pbkrs.com/https://www.reuters.com/graphics/AUTOMATED-202512/CONFBOARD-CONSUMER-CONFIDENCE-20Y/dwvkqlqbxvm/chart_eikon.jpg?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" width="1420" height="994" original-src="https://imageproxy.pbkrs.com/https://www.reuters.com/graphics/AUTOMATED-202512/CONFBOARD-CONSUMER-CONFIDENCE-20Y/dwvkqlqbxvm/chart_eikon.jpg"/>

GOOGL

GOOG

NVDA

AMZN

US stocks rose with the S&P 500 closing at a record high, driven by strong Q3 economic growth at 4.3%, surpassing expectations. Growth stocks outperformed, with Nvidia, Amazon, and Alphabet gaining over 1%. Despite weaker consumer confidence, hopes for a "Santa Claus rally" persist. ServiceNow dipped after acquiring Armis for $7.75 billion. Trading volumes are expected to thin as holidays approach.

- U.S. economic growth accelerated in Q3, with GDP increasing at a 4.3% annualized rate, surpassing economists' estimates.  
- The S&P 500 reached a closing record as growth stocks outperformed value, supported by robust consumer spending despite weaker consumer confidence in December.  
- Trading was light ahead of the holidays, with expectations of a "Santa Claus rally" amid hopes for continued market gains in the final trading days of the year.

US STOCKS-S&P registers record close as growth stocks advance