In a surprising turn, U.S. stock markets experienced a significant rally on Thursday, June 12, 2025, despite the Commerce Department's report indicating a 0.9% annualized decline in GDP for the second quarter. This marks the second consecutive quarter of economic contraction, meeting the unofficial definition of a recession. However, investors appeared undeterred, with the S&P 500 climbing 1.2%, the Dow Jones Industrial Average adding 330 points, and the Nasdaq Composite advancing 1.1%. Notably, the S&P 500's two-day gain of approximately 3.8% is its best rally following a Federal Reserve rate increase since 1970. aol.com
The Federal Reserve's recent 75 basis point rate hike and its indication of potentially slowing the pace of future increases may have contributed to investor optimism. Additionally, the latest GDP report has intensified debates about the U.S. economy's recession status. While two consecutive quarters of negative growth meet the unofficial definition of a recession, official declarations are made by the National Bureau of Economic Research (NBER). Investors are closely monitoring these developments, as they could influence future monetary policy decisions. aol.com