Stock Market Today: Stocks Slide as Solid GDP and Softer Inflation Vex Rate Cut Bets
Encouraging economic news damped hopes for accelerated rate cuts.



Joey Solitro
Stocks struggled despite a strong kick-off to mega-cap tech earnings season, as a solid reading on third-quarter economic growth and softer inflation data led market participants to trim their rate-cut bets.
Although Google parent Alphabet (GOOGL) took the spotlight on the earnings calendar after printing strong results the night before – and Microsoft (MSFT) and Meta Platforms (META) results were on tap after the bell – macroeconomic news set the tone for Wednesday's session.
Economic news in focus
Real gross domestic product (GDP) increased at an annual rate of 2.8% in the third quarter, according to the advance estimate provided by the U.S. Bureau of Economic Analysis. Economists were looking for the economy to expand at a 2.9% annualized rate, but the backward-looking miss didn't phase market participants.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
"The slight undershoot in GDP probably is due to a slightly bigger-than-expected drag from the volatile net trade and inventory components," wrote Oliver Allen, senior U.S. economist at Pantheon Macroeconomics. "The strong headline growth number was, once again, underpinned by a solid increase in consumers' spending, which grew by 3.7%, the fastest pace in over a year."
Most importantly, a closely watched measure of underlying inflation continued to trend toward the Federal Reserve's 2% target, experts said. "These inflation declines were very close to expectations and shouldn't be a barrier for the Fed to gradually cut rates in November," wrote Scott Anderson, chief U.S. economist at BMO Capital Markets.
In other economic news, the ADP National Employment Report revealed that private employers added 233,000 jobs in October, the most since July 2023.
"Job growth was surprisingly solid in October despite Hurricanes Helene and Milton wreaking havoc in the Southeast and the impacts of the Boeing and dock workers strikes," Comerica Chief Economist Bill Adams wrote in a note to clients.
The ADP data, which some economists dismiss as a public relations exercise, precedes the release of the next jobs report. The nonfarm payrolls data are sure to inform the Federal Reserve's thinking as it prepares for the next Fed meeting.
"As much as the U.S. labor market continues to cool, it remains in decent shape," notes Nicolas Colas and Jessica Rabe, co-founders of DataTrek Research. "This is overall bullish for U.S. equities as some weakness allows the Fed to keep cutting rates, but an overall decent jobs market supports corporate profits."
Elsewhere, pending home sales increased 7.4% in September, with growth in all four regions month over month, according to the National Association of Realtors.
"The larger-than-expected increase was due to strong increases across all four regions of the U.S.," said Eugenio Alemán, chief economist at Raymond James. Lower mortgage rates and higher inventory drove the largest month-over-month increase in pending home sales since August 2020, the economist added, a trend he expects to continue "as the Fed cuts interest rates over the next twelve months."
Wednesday's economic news dashed hopes for an accelerated pace of rate cuts, in turn helping put a damper on equities. At the closing bell, the blue chip Dow Jones Industrial Average slipped 0.2% to 42,141, while the broader S&P 500 fell 0.3% to 5,813. The tech-heavy Nasdaq Composite lost 0.6% to end at 18,607.
Stocks on the move
Advanced Micro Devices (AMD) stock sank 10.6% after the semiconductor company met or beat expectations for its third quarter but its fourth-quarter outlook failed to impress.
AMD said it anticipates Q4 revenue of approximately $7.5 billion, plus or minus $300 million, which was in-line with analysts' expectations of $7.54 billion.
"AMD's stock was priced for a beat and raise," Summit Insights analyst Kinngai Chan told Reuters. "Clearly, AMD's outlook was not good enough for investors."
Reddit (RDDT) stock rallied 42% after the social media company beat top- and bottom-line expectations for its third quarter, which included a surprise profit, and issued guidance on the fourth quarter that also beat expectations.
For the third quarter, Reddit anticipates revenue of $385 million to $400 million, well ahead of analysts' expectations for revenue of $357.9 million.
"In the near term, historically, Q4 has been our largest revenue quarter of the year," said Reddit Chief Financial Officer Andrew Vallero on the company's conference call. "So we're focused on execution. Medium and longer term, Reddit is scaling profitably."
GOOGL stock pops in a down market
Alphabet gained 2.8% after the Magnificent 7 stock beat top- and bottom-line expectations for its third quarter. The revenue increase was fueled by its Google Cloud unit.
Google Cloud reported 35% sales growth to $11.4 billion, driven by accelerated growth in the Google Cloud Platform, which includes the company's AI infrastructure, generative AI products and core cloud services.
Meanwhile, total advertising revenue increased 10.4% year over year to $65.9 billion, including 12.2% growth at YouTube to $8.9 billion.
"GOOGL is our top large-cap stock pick for 2024, owing to a strong macro backdrop, falling interest rates, record political ad spending, data advantages, and Generative AI integrations," said Needham analyst Laura Martin, who rates shares at Buy.
Google stock added $62 billion in market cap Wednesday, or more than the entire market value of Travelers (TRV), a Dow Jones stock. But then long-term shareholders are used to such outsized rewards by now. Indeed, GOOGL stock is among the top wealth creators of all time.
To put it another way, anyone who invested $1,000 in Google stock 20 years ago would be very happy with their market-crushing returns today.
Related content
- When Is the Next Jobs Report?
- Best Stocks of the Bull Market: Buy, Sell or Hold?
- All 30 Dow Jones Stocks Ranked: Buy, Sell or Hold?
Get Kiplinger Today newsletter — free
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Dan Burrows is Kiplinger's senior investing writer, having joined the publication full time in 2016.
A long-time financial journalist, Dan is a veteran of MarketWatch, CBS MoneyWatch, SmartMoney, InvestorPlace, DailyFinance and other tier 1 national publications. He has written for The Wall Street Journal, Bloomberg and Consumer Reports and his stories have appeared in the New York Daily News, the San Jose Mercury News and Investor's Business Daily, among many other outlets. As a senior writer at AOL's DailyFinance, Dan reported market news from the floor of the New York Stock Exchange.
Once upon a time – before his days as a financial reporter and assistant financial editor at legendary fashion trade paper Women's Wear Daily – Dan worked for Spy magazine, scribbled away at Time Inc. and contributed to Maxim magazine back when lad mags were a thing. He's also written for Esquire magazine's Dubious Achievements Awards.
In his current role at Kiplinger, Dan writes about markets and macroeconomics.
Dan holds a bachelor's degree from Oberlin College and a master's degree from Columbia University.
Disclosure: Dan does not trade individual stocks or securities. He is eternally long the U.S equity market, primarily through tax-advantaged accounts.
- Joey SolitroContributor
-
Married? Five Ways to Ensure Your Estate Plans Work in Tandem
Getting on the same page now means fewer potential problems when it counts.
By Kiplinger Advisor Collective
-
12 Investments No Retiree Should Make
In retirement, when it's wise to take fewer risks with your nest egg, some investments are just nuts.
By David Rodeck
-
Before You Invest Like a Politician, Consider This Dilemma
As apps that track congressional stock trading become more popular, investors need to take into consideration some caveats.
By Ryan K. Snover, Investment Adviser Representative
-
How to Put Together Your Personal Net Worth Statement
Now that tax season is over for most of us, it's the perfect time to organize your assets and liabilities to assess your financial wellness.
By Denise McClain, JD, CPA
-
Stock Market Today: Trump Retreats, Markets Rejoice
Stocks rally, yields soften, the dollar rises, and even beaten-down names enjoy the wages of potential trade peace.
By David Dittman
-
Tesla Stock Pops as Elon Musk Promises DOGE Draw Back
Tesla reported a sharp drop in first-quarter earnings and sales, as the EV maker suffered a backlash to its CEO's political ambitions.
By Karee Venema
-
Bouncing Back: New Tunes for Millennials Trying to Make It
Adele's mournful melodies kick off this generation's financial playlist, but with the right plan, Millennials can finish strong.
By Alvina Lo
-
Early-Stage Startup Deals: How Do Convertible Notes Work?
Some angel investors support early startups by providing a loan in exchange for a convertible note, which includes annual interest and a maturity date.
By Murat Abdrakhmanov
-
Stock Market Today: Stocks Soar on China Trade Talk Hopes
Treasury Secretary Bessent said current U.S.-China trade relations are unsustainable and signaled hopes for negotiations.
By Karee Venema
-
How Can Investors Profit From AI's Energy Use?
Global energy demand is expected to grow by leaps and bounds over the next several years as AI usage accelerates. Here's how to get a piece of the pie.
By Jacob Schroeder