25-4-2024 (NEW YORK) The Dow Jones Industrial Average, alongside other major stock indexes, experienced a significant downturn on Thursday in response to disappointing first-quarter GDP data. Amidst this backdrop, Meta Platforms (META), one of the Magnificent Seven players, witnessed a steep decline following the release of its first-quarter earnings results. Investors are now awaiting the earnings reports of Google-parent Alphabet (GOOGL) and Microsoft (MSFT) after the market closes today.
The Dow Jones Industrial Average plummeted by 1.7%, shedding 650 points in morning trading, while the S&P 500 saw a loss of 1.4%. Similarly, the tech-centric Nasdaq composite experienced a sharp decline of 1.9% following the opening bell.
Early Thursday, the 10-year Treasury yield inched higher to 4.73%, while oil prices registered a modest increase of 0.3%, with West Texas Intermediate futures hovering around $83 a barrel.
Reflecting the market sentiment, U.S. exchange-traded funds also saw declines, with the Nasdaq 100 tracker Invesco QQQ Trust ETF (QQQ) dropping by 2% and the SPDR S&P 500 ETF (SPY) losing 1.4%.
The downturn was exacerbated by the release of first-quarter GDP data by the Bureau of Economic Analysis, revealing a sluggish growth rate of 1.6% compared to the fourth-quarter growth of 3.4%. This figure fell well below the expected 2.3% growth rate.
However, the BEA highlighted that the core Personal Consumption Expenditures price index, the Federal Reserve’s primary inflation gauge, surged at an annual rate of 3.7% in the first quarter, surpassing expectations of 3.4%. Meanwhile, the headline PCE price index, which incorporates food and energy prices, rose by 3.4%.
In a contrasting development, the Labor Department reported a decline in jobless claims to 207,000, defying expectations of a rise to 215,000 compared to the previous week’s figure of 212,000, as per Econoday estimates.
