Inflation, growth worries: Dow falls 600 points on live updates

The Bureau of Economic Analysis reported that US gross domestic product rose 1.6% in the first quarter. Economists polled by Dow Jones had forecast GDP growth of 2.4%.

The report showed that consumer prices rose at a 3.4% pace in the quarter, up from a 1.8% advance in the previous quarter, with a slower growth rate. That raised concerns about persistent inflation and questioned whether the Federal Reserve could cut rates anytime soon.

“In the short term, the numbers don't look like a green light for either the bulls or the bears… Uncertainty is unlikely to ease pressure on a market experiencing its deepest pullback since last year,” said Chris Larkin., Managing Director of Trading and Investments at Morgan Stanley's E*Trade.

Following the GDP print, traders downplayed expectations of the Federal Reserve easing monetary policy. Traders are now predicting an interest rate cut this year CME FedWatch tool.

Sluggish GDP added further pressure to an already tense market.

Meta plunged 13% in premarket trade after the social media giant gave light earnings guidance for the second quarter. It was the stock's biggest one-day decline since October 2022. International Business Machines also fell 8% after missing consensus estimates for first-quarter earnings.

“For all the attention given to AI being developed over the past nine months, Meta's failure to meet its revenue growth projections in Q1 raises questions about whether monetization of this technology is as easy as merchants have been led to believe by management.” Theory said Wiseman, global FX and rates strategist at Macquarie.

Meta's report raises concerns more than any other major tech release. Microsoft and Alphabet are scheduled to call earnings after Thursday's close.

10:46 am: IBM and Caterpillar Dow lower

The Dow was down nearly 700 points in early trading Thursday, putting the blue-chip average on track for its worst day this year.

IBM and Caterpillar led the 30-stock index into the red, falling more than 9% and 7%, respectively, on the back of earnings. Both missed analyst estimates for earnings in the quarter.

Big tech names Microsoft and Amazon were the next worst performers, down nearly 4% and 3% respectively.

More than two out of every three Dow stocks fell in the session. Merck and UnitedHealth rose more than 1% each in the session after reporting better-than-expected earnings this morning.
– Alex Haring

Shares of Meta Platforms fell 11.34% on Thursday. These losses made the stock its worst day since Oct. 27, 2022, when the meta fell 24.56%.

Shares fell after Meta issued weak revenue guidance, which overshadowed better-than-expected revenue in the first quarter. The selloff came after CEO Mark Zuckerberg spoke about the company's long-term investments in artificial intelligence and the Metaverse.

The New York Stock Exchange traded about 10 shares lower for every advance on Thursday as the latest GDP report and new technology earnings dampened investor sentiment. Overall, 2,386 NYSE-listed stocks fell, while 210 advanced.

– Fred Imbert

If inflation continues to stick, a disappointing US GDP print could cause trouble for the stock market, an investor said.

“The report was the worst of both worlds: economic growth slowing and inflationary pressures lingering,” wrote Chris Zaccarelli, chief investment officer at the Independent Advisor Alliance.

“The central bank wants to see inflation continue to decline, but the market wants to see economic growth and corporate profits increase, so if both don't go in the right direction it will be bad news for the markets,” he continued. .

The data boosts the stakes for the Personal Consumption Expenditures report due out on Friday. Investors are hoping the PCE report, the central bank's preferred inflation measure, will show an improvement in price pressures after March's consumer inflation report came in higher than expected.

– Sarah Min

Stocks opened lower on Thursday, selling off after new gross domestic product data showed signs of slowing economic growth.

The Dow Jones industrial average retreated 500 points, or 1.3%. The S&P 500 retreated 1.4%, while the Nasdaq Composite lost 2.3%.

– Brian Evans

Slowing economic growth could be one factor pushing the Federal Reserve toward rate cuts, with the central bank holding rates steady until inflation, as shown in the GDP report, rises.

– Jesse Pound

U.S. gross domestic product fell in the first quarter, the Bureau of Economic Analysis said Thursday, weighing on stock futures ahead of the opening bell.

Gross domestic product expanded 1.6% in the first quarter, while economists at Dow Jones had forecast 2.4% growth.

– Brian Evans