U.S. stock indexes edged higher in choppy trading on Thursday as bank shares rose after major lenders cleared the Federal Reserve's annual stress test, while strong economic data stoked bets of further interest rate hikes from the central bank.
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the number of Americans filing new claims for unemployment benefits unexpectedly fell last week, which indicated labor market strength. A separate report showed the U.S. gross domestic product increased at a 2.0% annualized rate in the first quarter, up from the 1.3% pace reported previously. Following Powell's hawkish comments and data, traders were pricing in an 89.3% chance the Fed would hike interest rates by 25 basis points to 5.25%-5.50% range in its July meeting, according to CME Group's Fedwatch tool, up from 74.4% a week earlier.
The Personal Consumption Expenditure index , the Fed's preferred inflation gauge, for May will be released on Friday. Economists polled by Reuters expect core rates to remain steady at 4.7%.
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