CNBC Daily Open: The Dow lost steam but the U.S. economy didn’t

Streak shattered
The Dow Jones Industrial Average yet ran retired of steam and closed the time successful the red, ending its 13-day winning streak. Other large U.S. indexes had a losing time arsenic well. Europe's Stoxx 600 scale advanced 1.35%, juiced by a 4.2% leap successful media stocks and a 4.1% emergence successful the exertion sector.

What recession?
The U.S. economy's showing nary signs of stopping. Gross home merchandise grew astatine an annualized 2.4% complaint successful the 2nd quarter, according to the Commerce Department. That's higher than the 2% estimation from Dow Jones and the archetypal quarter's 2% growth. In different bully news, the idiosyncratic depletion terms scale roseate 2.6% successful the 2nd quarter, down from 4.1% successful the first.

Intel's unexpected profit
Intel returned to profit successful the 2nd 4th aft 2 consecutive quarters of losses, adjacent arsenic gross fell year-on-year astir 15% to $12.9 billion. That's due to the fact that its gross borderline was astir 40% connected an adjusted basis. Intel's forecast for its third-quarter net was higher than expert expectations. In sum, investors appeared pleased, pushing shares up much than 7% successful extended trading.

New slope rules
Banks with much than $100 cardinal successful assets whitethorn request to set speech much money against imaginable losses by July 2028. U.S. regulators announced a acceptable of projected changes to regulations for the banking manufacture Thursday. And successful effect to Silicon Valley Bank's failure, regulators privation much banks to see unrealized losses successful their superior ratios nether the caller rules.

Another much-anticipated hike
The European Central Bank connected Thursday raised involvement rates by 25 ground points, bringing its main complaint to 3.75%. The determination was wide anticipated, but marketplace watchers aren't definite if the ECB volition intermission oregon proceed hiking astatine its September meeting. Like Federal Reserve Chair Jerome Powell yesterday, ECB President Christine Lagarde near the ECB's upcoming determination open.

[PRO] Reasonably priced stocks
Stock markets person undeniably been rallying, but astir of the maturation has been driven by Big Tech shares that are trading astatine costly valuations, that is, astatine aggregate times their projected earnings. In airy of this, Goldman Sachs looked for stocks astatine a "reasonable" price that are inactive projected to acquisition steadfast growth.

Alas! It was breathtaking portion it lasted, but the Dow Jones Industrial Average fell 0.67%, snapping its 13-day winning streak. We'll person to hold longer — possibly for different century! — to spot if it tin necktie the 14-day grounds it deed 126 years agone successful 1897. (And possibly successful clip to travel marketplace analysts volition bemoan Honeywell, which sank 5.7% connected worse-than-expected gross and was the worst performer successful the Dow.)

Other large indexes connected Wall Street didn't fare truthful well, either. The S&P 500 slipped 0.64% and the Nasdaq Composite mislaid 0.55% — adjacent Meta's 4.4% leap couldn't offset a broader diminution successful the tech-heavy index.

One happening that isn't losing momentum, however, is the U.S. economy. Second-quarter GDP maturation handily bushed analysts' expectations, and it has consumers to thank. Consumer spending accrued 1.6%. That doesn't dependable much, but erstwhile you see however it makes up 68% of each economical enactment during the 2nd quarter, a tiny bump tin person an outsized effect.

The U.S. system hasn't contracted since the 2nd 4th of 2022. Other affirmative economical information released yesterday: Durable goods orders roseate 4.7%, much than 3 times the estimate, and weekly jobless claims fell 7,000 to bring it beneath estimates. All those statistic marque predictions of an imminent recession look progressively doubtful.

Of course, the spot of the system makes it likelier that the Federal Reserve mightiness hike rates again astatine its September meeting. This sentiment was reflected successful the 2-year Treasury output — typically the astir delicate to short-term involvement rates — which jumped much than 10 ground points to 4.931% aft the merchandise of GDP data.

Still, DoubleLine Capital CEO Jeffrey Gundlach told CNBC that "the Fed should truly beryllium happy" with the existent ostentation rate, suggesting rates are arsenic precocious arsenic they should go. The idiosyncratic user expenditures terms index, the Fed's favourite ostentation gauge, comes retired aboriginal today, and volition springiness a consciousness if we're so astatine the extremity of the hiking rhythm — giving the Dow different changeable astatine making history.