Wall Street Braces for Rate Cut Bets Amid Mixed Earnings Reports

U.S. stock markets saw mixed reactions on Thursday as stronger-than-expected GDP growth buoyed investor confidence despite inflation concerns. Companies like Ford and IBM had contrasting earnings impacts, with Ford slumping due to high costs and IBM benefiting from software demand. Rate cut bets for September remained steady.

U.S. stock markets reflected mixed sentiments on Thursday, buoyed by stronger-than-anticipated GDP growth for the second quarter. Investors showed optimism as the economy expanded by 2.8%, surpassing estimates, while inflation continued to decelerate.

The day's corporate earnings revealed varied impacts: Ford's shares plummeted due to elevated costs affecting profit growth, whereas IBM enjoyed a lift thanks to high demand for its software and AI initiative, despite a slip in consulting revenues. American Airlines also suffered, slashing its full-year profit forecast.

Rate cut predictions for September remained firm at 78%, as per CME's FedWatch Tool, with market participants eyeing the upcoming PCE price index data for further indications. Meanwhile, megacap tech stocks, including Apple and Tesla, faced a downturn following recent earnings, adding to concerns of potential overvaluation.

(With inputs from agencies.)