Stock Market Steady as Strong US Economy Offsets Washington Uncertainty/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ S&P 500 gains 0.2% after early losses, extending Wednesday’s rally. Economic data remains solid, with strong home sales and jobless claims lower than expected. Accenture stock tumbles 7.6% on concerns over Elon Musk-led federal budget cuts.
Market Quick Look
- S&P 500: +0.2%
- Dow Jones: +88 points (+0.2%)
- Nasdaq Composite: +0.3%
- 10-Year Treasury Yield: 4.20% (-0.05%)
Stock Market Steady as Strong US Economy Offsets Washington Uncertainty
Deep Look: Wall Street Balances Strong Economy with Policy Uncertainty
NEW YORK (AP) — Wall Street showed modest gains Thursday as investors weighed signs of continued economic strength against policy uncertainty stemming from the Trump administration’s aggressive federal spending cuts and trade policies.
The S&P 500 rose 0.2%, adding to Wednesday’s gains, while the Dow Jones Industrial Average climbed 88 points (0.2%) and the Nasdaq Composite increased 0.3%.
The Federal Reserve’s decision to hold interest rates steady reassured investors about economic stability, but Fed Chair Jerome Powell cautioned that uncertainty surrounding government policies makes forecasting difficult.
Economic Data Remains Strong
Several economic reports released Thursday painted a mostly positive picture of the US economy:
- Unemployment claims: Lower than expected, suggesting a stable labor market.
- Home sales: February saw stronger-than-expected demand, fueled by a 17% increase in available inventory and moderate mortgage rates.
- Manufacturing in the mid-Atlantic region: Growth exceeded economists’ expectations, adding to optimism about the industrial sector.
Accenture Stock Drops Amid Federal Spending Cuts
Despite positive economic signals, policy-driven risks remain high. Consulting giant Accenture saw its stock drop 7.6%, making it one of the worst performers on Wall Street Thursday.
The federal government accounted for 17% of Accenture’s North American revenue last fiscal year, and investors fear that Musk’s Department of Government Efficiency (DOGE) could slash IT and consulting contracts as part of a broader downsizing of the federal workforce.
Investor Outlook: Cautious Optimism but Stagflation Risks Loom
Despite recent market declines, some analysts see potential for a near-term rally as Fed officials signaled possible interest rate cuts later this year.
However, stagflation concerns—a scenario of slowing growth and persistent inflation—remain a major risk. The Fed faces a delicate balancing act:
- Cutting rates could boost the economy, but it might also fuel inflation.
- Keeping rates steady could contain inflation, but it may slow economic growth further.
Global Markets Mixed
- London’s FTSE 100 slipped 0.1% after the Bank of England kept interest rates steady.
- Germany’s DAX lost 1%, following weaker-than-expected business sentiment data.
- Hong Kong’s Hang Seng index plunged 2.2%, weighed down by declines in technology stocks.
In the bond market, the 10-year Treasury yield fell to 4.20% from 4.25%, signaling that some investors are moving into safer assets amid Washington’s policy uncertainty.
What’s Next?
As the market digests the Fed’s latest outlook and economic data, investors will closely watch:
- Any new federal budget cuts and their impact on businesses.
- Upcoming inflation data to gauge whether interest rate cuts remain a possibility.
- Global market reactions, particularly in Europe and Asia, as trade policies evolve.
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