By Isabel Wang and Joseph Adinolfi
U.S. stocks finished higher on Thursday, with all three indexes scoring back-to-back gains after a batch of strong economic data and as investors waited to hear Friday from Federal Reserve Chairman Jerome Powell at Jackson Hole.
How did stocks end?
S&P 500 /zigman2/quotes/210599714/realtime SPX -0.19% rose 58.35 points, or 1.4%, to end at 4,199.12.
Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA +0.0047% gained 322.55 points, or 1%, to close at 33,291.78.
Nasdaq Composite /zigman2/quotes/210598365/realtime COMP -0.51% advanced 207.74 points, or 1.7%, finish ing at 12,639.27.
It was the best day of gains for all three indexes on a percentage basis since Aug. 12, according to Dow Jones Market Data.
On Wednesday, the Dow Jones Industrial Average rose 0.2%, the S&P 500 increased 0.3% and the Nasdaq Composite gained 0.4%.
What drove markets?
U.S. stocks ended near session highs on Thursday following revised readings on the performance of the U.S. and German economies for the second quarter, along with news of more fiscal stimulus measures out of China .
A revised reading on second-quarter gross domestic product showed the U.S. economy shrank by 0.6% , better than the 0.9% contraction from the original reading.
Eric Diton, president and managing director at the Wealth Alliance, said U.S. stocks had good reason to celebrate the latest reading on second-quarter GDP.
“The underlying data is not showing a recession, and that’s pretty ideal for this market because this market is praying for a soft landing,” Diton said.
Stocks contended with low trading volume intraday, which helped to exaggerate swings in the market. Wednesday’s session saw just 8.8 billion shares traded across the various Wall Street exchanges. That was the lowest volume so far this year and a decline of 26% compared with the daily average for 2022, according to Dow Jones data.
Market strategists blamed the low trading volume on seasonal factors, as well as the reluctance of some investors to make bold bets before Powell speaks on Friday at the Kansas City Fed’s annual economic symposium in Jackson Hole, Wyo.
Jeff Bierman, chief market technician at TheoTrade, didn’t expect the market to reach a bottom until October, and anticipated a continued downtrend next month as September historically tends to be a harsh month for stocks.
“You’re turning into the corner of the market where it’s overbought, then you’re turning into that weak seasonality, then you’re turning into a Fed rate hike…” Bierman told MarketWatch on Thursday. Despite “little green shoots of data,” he expects the S&P 500 to potentially retest 3,600, after which time “it will give the market the impetus to go long and strong for a while.”