S&P 500 nudges higher after strong GDP report, Tesla drags down Nasdaq: Live updates

The S&P 500 trimmed earlier gains as Tesla shares sold off, even as data indicated continued economic growth

The broad index rose 0.3%, cooling after rising as much as 0.6% earlier in the session. The Dow Jones industrial Average traded 110 points, or 0.3%, higher. The Nasdaq Composite was near flat, dragged down by a post-earnings tumble in Tesla shares.

Despite Thursday’s underperformance, the Nasdaq has outperformed this week, tracking to finish up 1.2%. The S&P 500 has advanced 0.9%, while the Dow is 0.1% higher on the week.

Gross domestic product data showed the U.S. economy grew at a rate of 3.3% in the fourth quarter. That’s much higher than the 2% expectation from economists polled by Dow Jones, underscoring continued economic resiliency despite interest rate hikes from the Federal Reserve.

Thursday’s report also included encouraging data on the inflation front. The personal consumption expenditures price index posted a quarterly gain of 2% when excluding food and energy, a core gauge that the Fed prefers when assessing inflation. Headline inflation increased just 1.7%.

“That was a really healthy mix of data,” said Kevin Gordon, senior investment strategist at Charles Schwab. “That’s pretty much as close to nirvana as you can get for the Fed in looking for non-inflationary growth.”

But a sell-off in Tesla, a retail investor favorite, weighed on the market. Shares plunged 12% after the electric vehicle maker posted disappointing fourth-quarter results and warned of lower vehicle volume growth for 2024.

On the other hand, IBM jumped more than 9% after the technology company posted adjusted earnings and revenue that beat analysts’ predictions.

More than one-fifth of S&P 500 companies have reported financials this earnings season, according to FactSet. Nearly 74% of those have surpassed Wall Street expectations, the firm’s data shows.