Stock market today: US indexes drop as 1st-quarter GDP growth comes in weaker than expected
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- US stocks fell sharply Thursday as data showed the US economy grew much slower than expected to start 2024.
- The report also showed consumer prices rising in the quarter, complicating the Fed's rate-cut decision.
- Bond yields jumped, with the US 10-year Treasury hitting the highest in five months.
US stocks opened lower on Thursday as the Bureau of Economic Analysis reported that US economic growth was weaker than expected in the first three months of this year.
US GDP grew by 1.6% on an annualized basis in the first quarter, well below expectations of 2.4% and far short of the 3.4% increase in the final quarter of 2023.
While slower economic growth could bolster the case for the Federal Reserve to ease monetary policy, the GDP report on Thursday also showed consumer prices rising in the quarter, complicating the central bank's mission of fighting inflation without sparking an economic slowdown.
The market will be focused on personal consumption expenditures data, the Fed's preferred inflation measure, which is due out on Friday.
Bond yields jumped as traders reacted to the economic data. The 10-year Treasury rose to its highest level in five months, spiking five basis points to 4.706%.
"The softer first read of Q1 GDP could shift - again- the Fed's timetable for initiating the rate easing cycle, with July coming back into play," Quincy Krosby, chief global strategist at LPL Financial, said after the GDP report.
"If the PCE report due tomorrow similarly suggests the downward path of inflation has begun to once again gain momentum, it could serve as a catalyst for the market."
Meta shares dragged the wider tech sector down Thursday, with shares of the Facebook parent plunging 15% after it reported earnings results that beat estimates but delivered disappointing guidance.
Here's where US indexes stood shortly after at the 9:30 a.m. opening bell on Thursday:
- S&P 500: 5,006.32, down 1.3%
- Dow Jones Industrial Average: 37,929.84, down 1.4% (531 points)
- Nasdaq Composite: 15,418.33, down 1.9%
Here's what else is going on:
- Trump Media has gotten Congress involved in its crusade against short sellers.
- Tesla has a four-part path to generate 35% upside for its stock, Bank of America says.
- Billionaire Howard Marks says AI isn't immune to a crash.
In commodities, bonds, and crypto:
- West Texas Intermediate crude oil edged up to $82.84 a barrel. Brent crude, the international benchmark, ticked up to 88.05 a barrel.
- Gold rose 0.2% to $2,343.70 an ounce.
- The 10-year Treasury yield rose five basis points to 4.706%.
- Bitcoin fell 4% to $63,154.