Signs of Strength in U.S. Economy Power Stocks -- WSJ

By Chelsey Dulaney

Stocks are getting a boost after data showed the U.S. economy grew faster than expected in the second quarter while a key inflation gauge held steady.

The U.S. Commerce Department revised its estimate for U.S. gross domestic product growth for the second quarter to 2.2%, up from a prior estimate of 1.5%. Meanwhile, the Federal Reserve's preferred measure of inflation rose at an annual rate of 3.4% in August, matching July's revised rate.

The data illustrates the economy's resilience to the war in the Middle East. Investors further pared bets on an October interest-rate increase by the Fed after the readings, now pricing in only about a 35% chance of a hike. The retreat in rate-hike expectations kicked off Tuesday after a Fed official suggested the central bank isn't in a rush to raise rates.

That's helped stem a rout in U.S. Treasurys, with the 10-year yield only slightly higher after closing Tuesday at its highest level since 2002. Two-year yields are down slightly. The Nasdaq composite rose 1%, while the Dow industrials were roughly flat.

Oil prices have eased in recent days as exports from the Middle East pick back up, though Brent crude is on the rise again Wednesday.

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(END) Dow Jones Newswires

September 30, 2026 12:20 ET (16:20 GMT)