US stocks jump as investors cheer upbeat GDP data and strong Tesla earnings

US stocks jump as investors cheer upbeat GDP data and strong Tesla earnings
Reuters / Brendan McDermid
  • US stocks jumped Thursday as investors cheered strong GDP data and Tesla earnings.
  • GDP grew 2.9% over the fourth quarter, above estimates of 2.8%.

US stocks jumped on Thursday as investors cheered a surprise upside in fourth quarter GDP, bucking some fears of a looming recession.

All three indexes ended the day in the green, with a gain in the Nasdaq Composite led by Tesla, which jumped almost 11% on Thursday after beating earnings estimates and posting record revenue figures.

GDP grew 2.9% annualized over the fourth quarter, according to the Commerce Department, above the 2.8% estimated by economists.

Tesla, meanwhile, reported a record revenue of $24.32 billion over the last quarter, above estimates of $24.16 billion.

Analysts from Goldman Sachs and Wedbush reiterated their "Buy" rating for the EV maker, and predicted shares would rally 38% this year to $200. JPMorgan, though, rated Tesla as "Underweight," citing disappointing profit margins. The bank predicted shares would slide 24% to $120 this year.


Here's where US indexes stood at the 4:00 p.m. closing bell on Thursday:

Despite the positive surprise in GDP, some economists warned that the US is not out of the woods when it comes to a recession.

"The economy grew decently in 2022 -- the fears of a recession underway in the first half of last year were misplaced. However, the picture is different looking forward. The trend in real GDP weakened into year-end, and other economic indicators suggest the economy was on the cusp of contracting at the turn of the year," Comercia Bank chief economist Bill Adams said in a statement on Thursday. "Financial indicators like the inverted yield curve also signal a strong likelihood of a recession ahead," he added.

"Headline GDP was very strong beating consensus suggesting robust economic activity and if recession were to materialize a softer recession. However, the drivers behind this growth are far from ideal," Ash Alankar, the head of global asset allocation at Janus Henderson Investors said in a statement.

Alankar noted that personal consumption came in below expectations and the personal savings rate came in above expectations, a sign that consumers are already pulling back from spending out of caution.


Here's what else is going on:

In commodities, bonds, and crypto: