Wall Street slips as jobless claims fall and Q2 GDP was revised higher

[NOUVEL YORK CITY, USA]

Wall Street’s recent downward push continued on Thursday as the broader market averages observe selling pressure after jobless claims fell and GDP was revised higher in the third estimate.

Falling the hardest has been the tech focused Nasdaq Composite (COMP:IND [https://seekingalpha.com/symbol/COMP:IND]) which has dropped 0.5%. At the same time, the benchmark S&P 500 (SP500 [https://seekingalpha.com/symbol/SP500]) has found itself lower by 0.5% and the blue-chip Dow (DJI [https://seekingalpha.com/symbol/DJI]) is in the red by 0.3%.

Across sectors, nine of the 11 S&P groups are in negative trading territory, with Health Care suffering the most. At the other end, Energy has been the strongest performing segment on the session so far.

U.S. Treasury yields are also on the move higher [https://seekingalpha.com/news/4498906-yields-advance-after-strong-economic-data-dents-rate-cut-bets-us10y-reclaims-420]. The longer-end U.S. 10-year Treasury yield (US10Y [https://seekingalpha.com/symbol/US10Y]) pushed up 4 basis points to 4.19% and the shorter-end U.S. 2-year Treasury yield (US2Y [https://seekingalpha.com/symbol/US2Y]) moved up 5 basis points to 3.66%. A 7-year note auction tailed, indicating weaker demand for government-backed fixed-income securities.

At the same time the dollar index (DXY [https://seekingalpha.com/symbol/DXY]) tagged a 3-week high.

On the economic front, initial jobless claims [https://seekingalpha.com/news/4498845-initial-jobless-claims-drop-for-the-second-week] dropped for the second week.

Q2 GDP [https://seekingalpha.com/news/4498811-us-q2-gdp-revised-higher-to-38-in-third-estimate-intensifying-rebound] was revised higher to +3.8% in the third estimate, intensifying the rebound.

Durable goods orders [https://seekingalpha.com/news/4498847-durable-goods-orders-surprises-higher-in-august] surprised higher in August, while the U.S. international goods trade deficit [https://seekingalpha.com/news/4498755-us-international-goods-trade-deficit-narrows-more-than-expected-in-august] narrowed more than expected in August.

“Thursday's upward GDP revision for second quarter confirmed that the economy grew at a healthy clip, even as tariff uncertainty reached fever pitch during the quarter. The U.S. economy is resilient and the strong GDP is another indication that we are not at risk of any kind of recession, even with slowing labor market growth,” Paul Stanley, chief investment officer, Granite Bay Wealth Management stated.

“Thursday's GDP strength likely doesn't change the Federal Reserve's expected path of rate cuts, since the data is backward looking and was already well-known. The Fed wants to lower rates to keep the labor market in check and is able to do so at this time since inflation has remained under control, even though it's still above the Fed's target,” Stanley added.

Furthermore, the Fed balance sheet will come in later in the day.

In terms of Fed speak, Chicago Fed President Austan Goolsbee, New York Fed President John Williams, Fed Governor Michael Barr and San Francisco Fed President Mary Daly, among others, are all slated to take the stage in different events.

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