The main U.S. equity indexes bounced off their intraday lows Thursday, but extended their respective losing streaks to three. The short-term trend continued despite incoming data showing both consumers and businesses remain resilient drivers of economic growth.
The Bureau of Economic Analysis said before the opening bell that its final estimate of second-quarter gross domestic product showed the U.S. economy grew by 3.8% from April to June, faster than the 3.3% it saw in the second reading.
"It only seems fitting that the most distrusted bull market of all time is accompanied by the most distrusted economy of our lifetime,"
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Northlight Asset Management Chief Investment Officer Chris Zaccarelli observes. Zaccarelli adds that economic growth is exceeding "elevated" inflation "by a very large margin."
Acknowledging "the economy is not the stock market and vice versa," Zaccarelli suggests "to the extent that the companies reporting earnings are subject to economic cycles, a stronger economy allows for stronger earnings."
This cycle "usually leads to higher stock prices," he says, "and we have been witnessing this since April."
Indeed, a historic rally off the post-Liberation Day lows had the S&P 500 more than 2% above the average year-end analyst forecast among those tracked by Bloomberg, 6,486. "Only in 2024 and 1999," Alexandra Semenova writes, "have the calls lagged the market's actual return so much around this time of the year."
Meanwhile, the Census Bureau said new orders for durable goods increased by 2.9% in August following two months of declines.
"If the economic data keep going in this direction," suggests NYK Capital Management co-founder Daniel Altman, "it may be harder for the Federal Reserve to justify further rate cuts."
Altman explains that "the gradual settling of the current administration's policies has offered the economy some respite in the past month" and that "less uncertainty means less paralysis of hiring and investment decisions."
He is wary, however: "If we're going to have a government shutdown, it's anyone's guess what will happen next."
Next up on the economic calendar are the Fed's preferred inflation gauge, the Personal Consumption Expenditures Price Index (PCE), and the final University of Michigan Surveys of Consumers data for September, which are both due on Friday morning.
The next jobs report, meanwhile, is scheduled for release before the opening bell on Friday, October 3.
As of Thursday's closing bell, the blue-chip Dow Jones Industrial Average slipped 0.4% to 45,947, the broad-based S&P 500 fell 0.5% to 6,604, and the tech-heavy Nasdaq Composite tumbled 0.5% to 22,384.
IBM and INTC rise
International Business Machines (IBM, +5.2%) was No. 1 among the 30 Dow Jones stocks after HSBC (HSBC, -1.4%) said it used quantum computers made by Big Blue to predict price action in the bond market.
According to IBM, "The hybrid quantum-classical methods employed by the HSBC-IBM team yielded up to a 34% improvement over purely classical techniques for predicting which trades would be completed."
Meanwhile, Intel (INTC) surged 8.9% on a Bloomberg report that management is soliciting Apple (AAPL, +1.8%) for an equity investment in the struggling chip maker.
The semiconductor stock is now up 69.5% year to date, including a recovery of 92.4% off its 2025 intraday low of $17.67 on April 8, with a little help from outside investors, including the federal government.
Intel announced on August 22 that the Trump administration would invest $8.9 billion for 10% of INTC stock, two weeks after President Donald Trump called for CEO Lip-Bu Tan to resign because of his ties to China.
KMX stock gets jammed
CarMax (KMX, -20.1%), on the other hand, is probably on its own. One of 30 stocks that could rally 30% or more based on Wall Street price targets, KMX was down as much as 25.1% after it reported second-quarter earnings Thursday morning.
The automobile vending machine operator said earnings were 64 cents per share, short of a FactSet-compiled consensus estimate of $1.04. Same-store sales declined 6.3% vs expectations for 1.1% growth.
Following what CEO Bill Nash described as a "challenging" quarter, CarMax said it would cut costs by "at least $150 million" over the next 18 months.
Lithium Americas soars on potential U.S. stake
Lithium Americas (LAC, +22.3%) was up as much as 25.3% after the mining company nearly doubled on Wednesday as it continues to discuss terms of an equity stake with the Trump administration.
The White House has proposed the equity stake in lieu of a $2.26 billion loan from the Department of Energy to support development of its Thacker Pass mine.
Vancouver, Canada-based Lithium Americas owns the northern Nevada lithium mine in a joint venture with General Motors (GM, +1.1%).
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