Stocks closed broadly higher again Thursday as investors grew more optimistic that a slowing U.S. economy means the Federal Reserve can temper its aggressive interest rate hikes aimed at taming inflation.
The S&P 500 rose 1.2 percent as more than 80 percent of the stocks in the benchmark index closed higher. The Dow Jones Industrial Average gained 1 percent and the Nasdaq rose 1.1 percent. Smaller company stocks edged out the broader market, lifting the Russell 2000 by 1.3 percent.
The Commerce Department reported that the economy contracted at a 0.9 percent annual pace last quarter. The decline in the gross domestic product—the broadest gauge of the economy—followed a 1.6 percent annual drop from January through March. Consecutive quarters of falling GDP are an informal, though not definitive, indicator of a recession….