Stocks tumbled Thursday after a stronger-than-expected U.S. gross domestic product report showed that final third-quarter growth came in at 3.2% against a consensus estimate of 2.9%.The SPDR S&P 500 ETF Trust SPY was trading down 1.28% after the open Thursday. What Happened: The Federal Reserve's preferred inflation measure, the personal consumption expenditures index, was revised from 4.6% to 4.7% for the third quarter, indicating that inflation pressures aren't subsiding — meaning the Fed will likely will not be lowering interest rates into 2023, despite investor sentiment.'Real GDP turned up in the third quarter, increasing 3.2 percent after decreasing 0.6 percent in the second quarter,' according to the Bureau of Economic Analysis.'The upturn primarily reflected accelerations in nonresidential fixed investment and consumer spending, a smaller decrease in private inventory investment, and upturns in state and local as well as federal government spending that were partly offset by a larger decrease in residential fixed investment.'Futures tied to the Dow Jones Industrial Average fell 226 points or 0.67%. S&P 500 futures declined 0.82%, while Nasdaq-100 index futures were 1.14% lower on receipt of the economic data.'I'm leaning short on the equity markets,' David Tepper, founder of Appaloosa Management, said on CNBC Thursday.'The upside/downside just doesn't make sense to me when I have so many … central banks telling me what they are going to do.'Why It Matters: Last Wednesday, the Federal Open Market Committee voted unanimously to raise the fed funds rate by 0.5% to a new range of between 4.25% and 4.5%.The 0.5% rate hike marks a step down in tightening for the Fed following four consecutive 0.75% hikes, but economists expect the central bank will continue to raise interest rates in early 2023 in its ongoing battle against inflation.
With Thursday's GDP data, economists are likely to raise their interest rate expectations for the beginning of next year.Read next: AMC Entertainment Stock Is Tumbling: What's Going On?Photo via Shutterstock.