New York Stock Market Rises Amid Strong US Growth and Employment... Alphabet Up 6%

US Q3 Growth Rate 2.8%
Steady Growth Continues Supported by Consumer Spending
ADP October Private Employment 233K 'Exceeds Expectations'
MS and Meta Earnings Released After Market Close

The three major indices of the U.S. New York Stock Exchange showed an upward trend in early trading on the 30th (local time). Following an earnings surprise from Alphabet, Google's parent company, which raised expectations for big tech earnings, the market digested solid U.S. third-quarter economic growth and employment data.

As of 10:07 a.m. in the New York stock market, the blue-chip-focused Dow Jones Industrial Average was up 0.36% from the previous trading day, standing at 42,383.1. The large-cap-focused S&P 500 index rose 0.13% to 5,840.66, and the tech-heavy Nasdaq index was trading 0.17% higher at 18,744.88.

By individual stocks, Alphabet, which posted better-than-expected earnings after the market closed the previous day due to strong growth in its cloud business, was up 5.97%. Alphabet reported third-quarter revenue of $88.27 billion and earnings per share (EPS) of $2.12, surpassing market research firm LSEG’s estimates of $86.3 billion in revenue and $1.85 EPS. Semiconductor company AMD fell 9.13% as its fourth-quarter revenue forecast failed to meet investor expectations. Construction equipment maker Caterpillar dropped 2.12% after its third-quarter results fell short of expectations and it lowered its annual sales outlook. Microsoft (MS) and Meta, Facebook’s parent company, which also released earnings on the day, were up 1.13% and 0.55%, respectively.

On Wall Street, amid increased stock price pressure, investors are focusing on whether big tech’s growth momentum will continue and on discussions related to artificial intelligence (AI) investments.

Rob Howarth, senior investment strategist at U.S. Bank Asset Management, said, "Growth-oriented stocks like those in the Nasdaq have returned to the forefront," adding, "We are closely monitoring tech companies’ earnings to ensure that AI and corporate investments in productivity improvements can support strong future profit growth."

The U.S. third-quarter economic growth rate, released that morning, showed solid figures supported by resilient consumer spending. According to the Department of Commerce, the preliminary estimate of U.S. gross domestic product (GDP) growth for the third quarter was 2.8% annualized compared to the previous quarter. Although this was below the second quarter’s growth rate of 3.0% and the Dow Jones forecast of 3.1%, it was assessed as maintaining solid growth based on strong consumption. This also significantly exceeded the estimated U.S. potential growth rate, which is in the high 1% range.

Employment was also robust. According to the employment report released by ADP, a U.S. private labor market research firm, private sector job creation in October increased by 233,000, far exceeding the expert forecast of 110,000. This also greatly surpassed the previous month’s figure of 159,000.

This week, major economic indicators will continue to be released. On the 31st, the Federal Reserve’s most closely watched inflation indicator, the September Personal Consumption Expenditures (PCE) price index, and weekly initial jobless claims will be announced.

Government bond yields are declining. The U.S. 10-year Treasury yield, a global bond yield benchmark, fell 7 basis points (1 bp = 0.01 percentage points) from the previous trading day to 4.2%. The 2-year Treasury yield hovered around the previous day’s level of 4.11%.

International oil prices are rising. West Texas Intermediate (WTI) crude oil rose $1.04 (1.55%) from the previous trading day to $68.25 per barrel, and Brent crude, the global oil price benchmark, increased $1.12 (1.58%) to $71.85 per barrel.