Traders work through the opening bell on the New York Stock Exchange.
Johannes Eisele | AFP | Getty Images
Stocks tumbled Thursday after the newest U.S. financial information confirmed a pointy slowdown in progress and pointed to persistent inflation.
The Dow Jones Industrial Average slid 611 factors, or 1.6%, weighed down by steep declines in Caterpillar and IBM. The S&P 500 dropped 1.3%, and the Nasdaq Composite misplaced 1.7%.
U.S. gross home product expanded 1.6% within the first quarter, the Bureau of Economic Analysis mentioned. Economists polled by Dow Jones forecast GDP progress would are available in at 2.4%.
Along with the downbeat progress fee for the quarter, the report confirmed client costs elevated at a 3.4% tempo, effectively above the earlier quarter’s 1.8% advance. This raised concern over persistent inflation and put into query whether or not the Federal Reserve will be capable of minimize charges anytime quickly.
“In the short term, the numbers don’t appear to be a green light for either bulls or bears…the uncertainty is unlikely to ease pressures in a market experiencing its deepest pullback since last year,” mentioned Chris Larkin, managing director of buying and selling and investing at E*Trade from Morgan Stanley.
Following the GDP print, merchants moved down expectations for an easing of Federal Reserve financial coverage. Fed funds futures buying and selling information suggests there will probably be only one rate of interest minimize this yr, based on the CME FedWatch Tool
Tech tumble
The lackluster GDP added additional strain to an already-tense market contending with issues over a pullback in progress amongst know-how earnings.
Meta plunged 13% after the social media big issued mild income steerage for the second quarter. That can be the inventory’s greatest one-day decline since October 2022. International Business Machines additionally fell 8% after lacking consensus estimates for first-quarter income.
“For all of the attention given to generative AI in the past nine months, the failure of Meta to attain its revenue growth projections in Q1 is raising questions about whether the monetization of this technology is as easy as what traders were led to believe by management,” mentioned Thierry Wizman, international FX and charges strategist at Macquarie.
Meta’s report raises concern forward of different large tech releases. Microsoft and Alphabet are slated to put up earnings after the shut Thursday.
Chipmaker ETFs are a uncommon vibrant spot for traders Thursday
Semiconductor ETFs are performing effectively on Thursday even because the broader market struggles.
The VanEck Semiconductor ETF (SMH) was up about 0.7% on the session, whereas the Invesco PHLX Semiconductor ETF (SOXQ) was up about 0.9%.
The iShares Semiconductor ETF (SOXX) added about 0.5%.Nvidia was serving to to guide the group greater, rising greater than 2%. The chip big had a ten% sell-off of its personal final week, however is beginning to claw again these losses.
— Jesse Pound
10:46 a.m.: IBM and Caterpillar lead Dow decrease
The Dow has dived nearly 700 factors in early Thursday buying and selling, placing the blue-chip common on monitor for its worst day this yr.
IBM and Caterpillar led the 30-stock index into the crimson, dropping greater than 9% and seven%, respectively, on the again of earnings. Both missed analyst estimates for income within the quarter.
Big know-how names Microsoft and Amazon had been the following worst performers, shedding practically 4% and three%, respectively.
More than two out of each three Dow shares traded down within the session. Merck, which reported better-than-anticipated earnings this morning, and UnitedHealth bucked the downtrend, with every up greater than 1% within the session
— Alex Harring
10:22 a.m.: Meta shares on tempo for worst day since October 2022
Meta Platforms shares plummeted 11.34% on Thursday. The losses put the inventory on tempo for its worst day since October 27, 2022, when Meta declined 24.56%.
Shares fell after Meta issued weak income steerage that overshadowed its better-than-expected earnings within the first quarter. The sell-off intensified following CEO Mark Zuckerberg’s feedback on the corporate’s long-term investments in synthetic intelligence and the metaverse.
Meta shares on Thursday
10:04 a.m.: New York Stock Exchange decliners lead advancers 10-1
About 10 shares traded decrease on the New York Stock Exchange on Thursday for each one advancer, as the newest GDP report and new tech earnings dampened investor sentiment. Overall, 2,386 NYSE-listed shares fell, whereas 210 superior.
— Fred Imbert
9:52 a.m.: The U.S. GDP report was the ‘worst of each worlds,’ investor says
A disappointing U.S. GDP print might spell bother forward for the fairness market if inflation continues to show sticky, one investor mentioned.
“This report was the worst of both worlds: economic growth is slowing and inflationary pressures are persisting,” wrote Chris Zaccarelli, funding chief at Independent Advisor Alliance.
“The Fed wants to see inflation start coming down in a persistent manner, but the market wants to see economic growth and corporate profits increasing, so if neither are headed in the right direction then that’s going to be bad news for markets,” he continued.
The information additionally raises the stakes for the private consumption expenditures report that’s set to launch Friday. Investors are hoping the PCE report, which is the Fed’s most well-liked measure of inflation, will present an enchancment in pricing pressures after the March client inflation report got here in hotter than anticipated.
— Sarah Min
9:33 a.m.: Stocks fall after GDP information reveals slowing financial progress
Stocks opened decrease on Thursday, with equities promoting off after recent gross home product information signaled indicators of slowing financial progress.
The Dow Jones Industrial Average pulled again 500 factors, or 1.3%. The S&P 500 pulled again 1.4%, whereas the Nasdaq Composite misplaced 2.3%.
— Brian Evans
8:58 a.m.: 10-year Treasury yield jumps to highest stage since November
The benchmark Treasury fee topped 4.7% on Thursday.
While slowing financial progress could possibly be an element that pushes the Federal Reserve towards fee cuts, the rising costs proven within the GDP report might trigger the central financial institution to carry charges regular till inflation recedes.
— Jesse Pound
8:51 a.m.: Gross home product slowed within the first quarter
U.S. gross home product slowed within the first quarter, the Bureau of Economic Analysis mentioned Thursday, which weigh on inventory futures earlier than the opening bell.
GDP expanded 1.6% within the first quarter, whereas economists polled by Dow Jones forecast progress of two.4%.
— Brian Evans
https://www.cnbc.com/2024/04/25/dow-drops-more-than-600-points-on-inflation-and-growth-concerns-live-updates.html
