(Bloomberg) — U.S. stocks continued their advance after briefly stalling as traders reassessed the Federal Reserve’s stance and weighed new economic data. The yen remained lower after the Bank of Japan left borrowing costs unchanged.

Most read by Bloomberg

The S&P 500 rose 0.7% – lifted by gains at Nvidia Corp., Apple Inc. and Amazon.com Inc. – while the Nasdaq 100 rose 0.5%. The 10-year U.S. Treasury yield rose to 4.55%, a level last seen in May. A Bloomberg dollar index pared an earlier rise but hovered around 2022 highs.

Thursday’s data continued to show how resilient the US economy is. Notably, one of the Fed’s preferred inflation indicators was raised to 2.2%. With Chairman Jerome Powell saying that future easing would require new progress on inflation, markets will be closely watching the last notable data of the year – personal consumption spending for November – due out on Friday.

On Wednesday, the Fed reduced the number of interest rate cuts expected in 2025 to two, rattling markets and sending stock prices lower while Treasury yields rose. According to Evercore ISI’s Krishna Guha, the so-called hawkish pivot was likely what the central bank had planned ahead of next year’s meeting. Powell said Wednesday that some policymakers have begun to factor into their forecasts the possible impact of higher tariffs that President-elect Donald Trump might impose.

“The Fed has largely opted to increase its forecasts and pre-positions for Trump – bringing forward much of what would otherwise have been a more hawkish update in March,” Guha wrote in a note.

That makes the Fed’s announcement of a new phase of policy “totally hawkish, but not as hawkish as it looked,” Guha wrote. He expects the Federal Reserve to forego a rate cut in January unless there are cracks in the labor market.

The swap market now implies fewer than two quarter-point cuts for all of 2025, even less than suggested in the Fed’s so-called dot plot on Wednesday.

Traders also analyzed the gross domestic product figures on Thursday. Data showed the U.S. economy grew faster than previously expected in the third quarter. Consumer spending also increased. U.S. jobless claims fell last week due to volatility during the holiday season. U.S. existing home sales topped 4 million in November for the first time in six months.

The story continues