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The Dow eked out a gain Thursday, snapping its longest losing streak since 1974, even as the post-Federal Reserve rebound ran out of steam.

At 4:00 p.m. ET (21:00 GMT), the Dow Jones Industrial Average gained 15 points, or 0.04%, while the S&P 500 index and the NASDAQ Composite both fell by 0.1%.

US GDP shows healthy growth

The US economy grew faster than previously estimated in the third quarter, driven by robust consumer spending, according to data released earlier Thursday.

Gross domestic product increased at an upwardly revised 3.1% annualized rate, having been previously reported to have expanded at a 2.8% pace last quarter.

The economy grew at a 3.0% pace in the April-June quarter, and is expanding at a pace that is well above what Federal Reserve officials regard as the non-inflationary growth rate of around 1.8%.

This data plays into the idea that the Federal Reserve will be slow to cut interest rates further next year.

Fed sees only two more cuts in 2025

The US central bank cut interest rates by 25 basis points on Wednesday, as widely expected. However, policymakers indicated they now see only two more 25 bps rate cuts next year, compared with a prior forecast in September for four cuts.

The Federal Open Market Committee (FOMC) economic projections showed that inflation was still a long way from its 2% target, with the targeted metric expected to end this year at 2.4% and at 2.5% next year.

"I think investors have realized, as the Fed did in the last couple of months, that inflation was ticking up a little bit, and that the interest rate forecast of the Fed from September was probably not going to be accurate.

The prospect of interest rates remaining higher for longer than expected sent Wall Street indexes sharply lower on Wednesday, with heavy losses in the technology sector.

The blue chip DJIA slumped over 1,000 points, or 2.6%, marking its longest losing streak since 1974, while the S&P 500 dropped almost 3% and the Nasdaq Composite slipped 3.6%, its worst day since late July.

Micron slumps after weak guidance

Micron Technology (NASDAQ:MU) shares plunged 16% after the company issued weaker-than-expected second-quarter guidance, dragging the broader chip sector lower.

However, the broader tech sector continued to gain, led by NVIDIA Corporation (NASDAQ:NVDA) as investors remain confident that the AI-led rally is set to continue.

"I think AI specifically is secular, not cyclical, so it’s going to grow in the next several years, almost regardless of what happens to the economy," said Chief Strategist and Portfolio Manager Rhys Williams in an interview on Thursday. "You want to be aligned with those kinds of companies in the stock market, because I think that’s where the ongoing gains are going to be."

Elsewhere, Darden Restaurants (NYSE:DRI) stock gained over 14% after the restaurant operator posted fiscal second-quarter results ahead of expectations, with sales rising 6%, while adding upbeat guidance.

CarMax (NYSE:KMX) stock rose 3% after the used car retailer reported third-quarter earnings and revenue that topped analyst expectations, driven by increases in unit sales and strong margins.

Lamb Weston Holdings Inc (NYSE:LW) fell 20% after replacing its chief executive and cutting its 2025 earnings outlook following quarterly results that fell short of estimates.

*(Peter Nurse, Ayushman Ojha contributed to this article.)