Dow falls 500 points on inflation and growth concerns: Live update

Stocks fell on Thursday after the latest U.S. economic data showed a sharp slowdown in growth and pointed to persistent inflation.

of Dow Jones Industrial Average down 553 points (1.4%), caterpillar and IBM.of S&P500 fell 1.1%, Nasdaq Composite It decreased by 1.5%.

According to the U.S. Bureau of Economic Analysis, U.S. gross domestic product (GDP) expanded by 1.6% in the first quarter. According to a survey of economists conducted by Dow Jones, GDP growth is expected to be 2.4%.

In addition to slower growth rates in the quarter, the report showed that consumer prices rose at a pace of 3.4%, significantly faster than the 1.8% rise in the previous quarter. That raised concerns about persistent inflation and called into question whether the Fed could cut interest rates anytime soon.

“In the short term, this number does not seem to be a green light for either bulls or bears…uncertainty is unlikely to ease pressure in a market experiencing its most severe pullback since last year.” Chris Larkin said., Managing director of trading and investment at E*Trade, formerly of Morgan Stanley.

Traders lowered their expectations for the US Federal Reserve to ease monetary policy after the GDP data. Federal funds futures trading data suggests only one rate cut this year, according to CME FedWatch tool

The lackluster GDP battled concerns about slowing growth in technology revenues, adding further pressure to an already tense market.

Meta Shares plunged 13% after the social media giant released a weak second-quarter revenue outlook. This is the largest single-day decline in the stock price since October 2022. international business machine Shares fell 8% as first-quarter sales fell short of consensus estimates.

“Despite all the attention paid to generative AI over the past nine months, Meta’s failure to meet revenue growth estimates for the first quarter shows that traders have been led to believe by management that this technology is monetized.” This raises the question of whether it is really that simple.”” Thierry said. Mr Wisman, Global Currency and Interest Rate Strategist at Macquarie.

Meta’s report raises concerns ahead of other major technology releases. microsoft and alphabet Financial results are expected to be announced after the close of trading on Thursday.

12:00 p.m.: Thursday’s selloff pushes Dow into negative territory this week

Thursday’s decline pushed the Dow below its flatline this week, highlighting the magnitude of the single-day loss.

The blue-chip average was down more than 1.5% in late morning trading. Despite aiming for a gain of more than 1% heading into trading, the stock fell about 0.4% for the week.

The decline kept the Dow within 0.5% of its 2024 flatline.

The S&P 500 and Nasdaq Composite also fell in Thursday trading, but both remained on track to end the week higher. The broader S&P 500 index was on track to end the day up 0.8%, while the tech-heavy Nasdaq was on track for a 1% gain.

— Alex Harring

11:24 a.m.: Chipmaker ETFs are a rare bright spot for investors on Thursday.

Semiconductor ETFs performed well on Thursday, even as the broader market struggles.

The VanEck Semiconductor ETF (SMH) rose about 0.7% during the trading session, while the Invesco PHLX Semiconductor ETF (SOXQ) rose about 0.9%.

The iShares Semiconductor ETF (SOXX) rose about 0.5%, and Nvidia rose more than 2%, helping lead the group. The semiconductor giant is starting to recoup losses after its stock fell 10% last week.

— Jesse Pound

10:46 a.m.: IBM and Caterpillar lead the Dow Jones Industrial Average

The Dow Jones Industrial Average plunged about 700 points in early Thursday trading, marking the blue-chip average’s worst day of the year.

IBM and caterpillar On the back of the gains, the 30-stock index fell more than 9% and 7%, respectively, and was in the red. Both companies’ sales for the quarter were below analysts’ expectations.

The next worst performers were tech giants Microsoft and Amazon, which fell nearly 4% and 3%, respectively.

More than two out of three Dow stocks fell during trading.Merck and UnitedHealth, which reported better-than-expected profits this morning, bucked the downtrend and each rose more than 1% in trading.

— Alex Harring

meta platform The stock price plunged 11.34% on Thursday. The loss gave the stock its worst pace since October 27, 2022, when Meta fell 24.56%.

Shares fell after Meta issued a weak earnings outlook that masked better-than-expected first-quarter earnings. The selloff was fueled by CEO Mark Zuckerberg’s comments about the company’s long-term investments in artificial intelligence and the Metaverse.

About 10 stocks fell for every gainer on the New York Stock Exchange on Thursday, as the latest gross domestic product reports and new technology earnings dampened investor sentiment. Overall, 2,386 NYSE-listed stocks fell in value and 210 stocks rose.

— Fred Imbert

One investor said if inflation remained high, it could lead to disappointing U.S. GDP results and trouble for the stock market.

“This report was the worst in terms of slowing economic growth and continuing inflationary pressures,” said Chris Zaccarelli, head of investments at Independent Advisor Alliance.

“The Fed wants inflation to start falling sustainably, but the market wants economic growth and corporate profits to rise. So if neither is going in the right direction, that’s bad for the market.” It’s going to be news.” .

The data also raises bets on the personal consumption spending report, which is scheduled to be released on Friday. Investors are hoping the PCE report, the Fed’s preferred inflation measure, will show improvement in price pressures after the March consumer inflation report was higher than expected.

— Sarah Min

Stocks started lower on Thursday, with stocks selling off after new gross domestic product (GDP) data suggested signs of slowing economic growth.

The Dow Jones Industrial Average fell 500 points, or 1.3%. The S&P 500 fell 1.4% and the Nasdaq Composite fell 2.3%.

— Brian Evans

Slower economic growth could prompt the Federal Reserve to cut interest rates, but the rise in prices shown in the GDP report could lead the central bank to keep interest rates on hold until inflation subsides. There is.

— Jesse Pound

The U.S. Bureau of Economic Analysis reported Thursday that U.S. gross domestic product (GDP) slowed in the first quarter, weighing on stock futures ahead of the opening bell.

GDP expanded 1.6% in the first quarter, compared with 2.4% expected by economists compiled by Dow Jones.

— Brian Evans