U.S. Growth Surge Intensifies the Great Interest Rate Debate

NEW YORK (TheStreet) -- Investors exhaled after U.S. economic growth rebounded in the second quarter, erasing fears that the recovery was losing steam.

The Bureau of Economic Analysis on Wednesday reported that second-quarter gross domestic product popped by 4%, which easily beat a consensus of economists' expectations for 3% growth.

READ MORE: Jobless Claims Hit 8-Year Low, but Here's Why You Shouldn't Be Excited

WATCH: Consumer Confidence Rockets to Highest Level Since October 2007

Despite the jump, analysts were warning investors not to be too exuberant.

" If you had money sitting on the sidelines, I think it's a good time to start looking at if there [are] some areas that you wanted to start investing in," Chris Gaffney, senior market strategist at EverBank Wealth Management, said in an interview. "Don't jump in front of the train, but maybe jump onto it a little bit -- slowly climb back into the equity market."


WATCH: More market update videos on TheStreet TV | More videos from Joe Deaux

Boosting the stronger-than-anticipated quarter was a 2.5% increase in consumption, including a 14% surge in durable goods consumption.

Residential investment gained by 7.5%, while business investment increased by 5.5%.

The data follows first-quarter GDP that contracted by 2.1% largely due to a colder-than-usual winter, which kept consumers from going out and spending on retail items and purchasing homes, among other key drivers of the economy.

Early buying entered the stock market on Wednesday following the solid GDP data, but analysts looked past the positives and suggested that this begged the question of how the Federal Reserve will react.

If you liked this article you might like

Market Is on the Straight and (Very) Narrow

Look Back to Go Forward

Stock Observations; Reviewing Equities: Doug Kass' Views

Even North Korea's Kim Jong Un Can't Stop This Epic S&P 500 Stock Rally

Robots Might Be Biggest Obstacle for Stock Market Bears