US stocks advance as data shows strong economy

Stocks are rallying after China pledged fiscal stimulus and latest economic data highlighted the strength of the US economy.

The S&P 500 rose after revised data showed the US economy emerged from the pandemic in better shape than initially expected. A decline in US jobless claims underscored the resilience of the labor market.

Micron Technology Inc.’s post-earnings surge and US-listed China stocks advancing boosted equities. The Nasdaq 100 climbed more than 1%. In Europe, the Stoxx 600 index headed for a record close. The dollar stayed lower. The 10-year US Treasury yield lingered around 3.77%.

The promises by China’s Politburo, alongside growing expectations that the Federal Reserve and European Central Bank will push ahead with rate cuts, contributed to market ebullience. Fed Chair Jerome Powell’s address on Thursday didn’t include commentary on the economic outlook or path for monetary policy. Other Fed officials are also speaking at various events today, with traders tuning in for clues on the central bank’s trajectory.

“The message, over the last 10 days or so, from monetary and fiscal policymakers across the globe, has been clear and undeniable - the policy ‘put’ is well and truly back,” said Michael Brown, a strategist at Pepperstone Group Ltd. “The path of least resistance is likely to continue to lead to the upside, over both the short- and medium-term.”

Money markets have flipped to favor a half-point cut by the Fed in November, with traders now pricing almost 39 basis points of reductions after lackluster US consumer data earlier in the week.

The US central bank’s preferred price metric and a snapshot of consumer demand will give more clues on the economy’s health on Friday.

“The Federal Reserve is more concerned about growth than they let on,” said Vanguard Chief Economist Joe Davis on Bloomberg TV. “Our view is they are going to be more aggressive in the near term.”