U.S. Stocks Showing A Lack Of Direction Following Stronger Than Expected GDP Data

With the holidays looming, stocks have shown a lack of direction over the course of the trading day on Tuesday. The major averages have spent the day bouncing back and forth across the unchanged line after moving notably higher over the past few sessions.

Currently, the major averages are posting modest gains. The Dow is up 82.66 points or 0.2 percent at 48,445.34, the Nasdaq is up 31.28 points or 0.1 percent at 23,460.11 and the S&P 500 is up 11.11 points or 0.2 percent at 6,889.60.

The lackluster performance on Wall Street comes following the release of a mixed batch of U.S. economic data.

A report released by the Commerce Department this morning showed the U.S. economy grew by much more than expected in the third quarter of 2025.

The Commerce Department said real gross domestic product spiked by 4.3 percent in the third quarter after surging by 3.8 percent in the second quarter. Economists had expected GDP to jump by 3.3 percent.

However, the report also showed the pace of consumer price growth accelerated in the third quarter compared to the second quarter.

The data has led to renewed uncertainty about the outlook for interest rates heading into the new year, with the Federal Reserve scheduled to hold its first meeting of 2026 in late January.

CME Group’s FedWatch Tool is currently indicating an 86.7 percent chance the Fed will leave interest rates unchanged, up from 58.0 percent a month ago.

“These data, along with the recently released employment and CPI metrics, show an economy that is growing, but unevenly, and one where inflation is still running well above the FOMC’s target,” said Mortgage Bankers Association SVP and Chief Economist Mike Fratanton.

He added, “We forecast that the FOMC will be on hold at its January meeting, and will likely cut rates just once more next year.”

Meanwhile, a separate Commerce Department showed durable goods orders slumped by more than expected in the month of October amid a steep drop in orders for transportation equipment.

The Conference Board also released a report showing consumer confidence deteriorated for the fifth consecutive month in December.

Sector News

Reflecting the lackluster performance by the broader markets, most of the major sectors are showing only modest moves on the day.

Airline stocks have shown a notable move to the downside, however, with the NYSE Arca Airline Index falling by 1.4 percent.

Gold stocks are also seeing some weakness despite a modest increase by the price of the precious metal, while some strength is visible among pharmaceutical and natural gas stocks.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Tuesday. Japan’s Nikkei 225 Index closed just above the unchanged line and China’s Shanghai Composite Index inched up by 0.1 percent, while Australia’s S&P/ASX 200 Index jumped by 1.1 percent.

Meanwhile, the major European markets are turning in a mixed performance on the day. While the French CAC 40 Index is down by 0.1 percent, the German DAX Index is up by 0.3 percent and the U.K.’s FTSE 100 Index is up by 0.4 percent.

In the bond market, treasuries are extending the downward move seen over the two previous sessions. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 1.7 basis points at 4.186 percent.

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