U.S. stocks rise amid sluggish economic data. Why.

Major U.S. stock indexes rose in early trading on March 13 - data on U.S. GDP for the last quarter of 2025, as well as indicators of the index of personal consumption expenditures in the States for January indicated a slowdown in the economy, than strengthened hopes for lower interest rates of the Federal Reserve, Bloomberg writes.

In particular, the broad index of U.S. stocks S&P 500 added 0.82% in the first half-hour of the session, technological Nasdaq Composite - rose by 0.87%, the index of "blue chips" Dow Jones - 0.67%.

The price of Brent crude oil fell just over 1% to $99 a barrel.

The U.S. Bureau of Economic Analysis on March 13 sharply lowered its estimate of U.S. economic growth in the fourth quarter of 2025, leading to lower bond yields and an increased likelihood of one or more interest rate cuts this year, Barron's wrote. A slowdown in consumer spending and a record-long U.S. government shutdown played a key role in the revised estimate, the agency explained.

As a result, according to the Bureau of Economic Analysis, U.S. GDP in the last three months of 2025 grew by only 0.7% in annualized terms, although economists expected to see this figure at 1.5%, and in the third quarter of 2025, U.S. GDP added 4.4%. At the same time, inflation in the key indicator for the Fed - the Core Personal Consumption Expenditures Index (Core PCE) - accelerated to 3.1% in January in annualized terms - this is the highest growth rate of Core PCE since the spring of 2024, Barron's noted.

- The macroeconomic picture remains mixed, said Peter Cardillo, chief market economist at Spartan Capital Securities, writes Reuters. According to him, the downward revision of the U.S. GDP estimate was stronger than expected. At the same time, PCE inflation was broadly in line with forecasts. According to him, inflation remains high and stable, and a possible rise in energy prices may further increase pressure on prices, so the Fed is likely to keep rates at the current level for longer.

- "GDP and the labor market continue to grow, but the pace of that growth is slowing, raising concerns about the health of the [U.S.] economy. And this was happening even before the war in the Middle East, which triggered a spike in oil prices," Bloomberg quoted Chris Zaccarelli, chief investment officer at Northlight Asset Management, as saying.

- Most economic indicators released on March 13 were broadly in line with expectations, except for weak data on durable goods orders and a weaker GDP estimate, said Ingalls & Snyder senior portfolio strategist Tim Griskey (quoted by Reuters). The data raises questions about the strength of the U.S. economy, he said. That said, the key factor for financial markets right now remains the war in the Middle East, he added.

- "In the short term, the market is likely to remain 'news headline dependent'. Therefore, any significant announcements by the [U.S.] president - both positive and negative - could have a noticeable impact on market dynamics as early as today," agrees Miller Tabak analyst Matt Maley (quoted by Bloomberg).

- "We have [risks with] large-scale investments in artificial intelligence, we have [risks in] the private credit market... and we have the energy situation. And it is the energy situation that we are most concerned about," Morgan Stanley Private Wealth Management managing director Chris Toomey remarked (quoted by CNBC). If shipping along the key route for the world's oil supplies - the Strait of Hormuz - is significantly disrupted for more than two to three months, it "would be a really serious problem," he said.

Traders continue to follow the situation in the Middle East, but now along with it the attention of the markets is shifting to the Federal Reserve meeting next week, where the regulator is expected to keep interest rates unchanged, Bloomberg notes. This forecast was formed even before the latest events in the Middle East.

This article was AI-translated and verified by a human editor