- U.S. stocks fell sharply on Thursday after data showed the U.S. economy will grow much slower than expected in early 2024.
- The report also showed consumer prices rose in the quarter, complicating the Fed’s decision to cut interest rates.
- Bond yields soared, with the 10-year U.S. Treasury note hitting its highest level in five months.
U.S. stocks opened lower Thursday after the Bureau of Economic Analysis reported that U.S. economic growth in the first three months of the year was weaker than expected.
U.S. gross domestic product (GDP) grew at an annualized rate of 1.6% in the first quarter, well below expectations of 2.4% and far short of the 3.4% growth in the final quarter of 2023. Ta.
Slower economic growth could strengthen the case for the Federal Reserve’s monetary easing, while Thursday’s gross domestic product report also showed consumer prices rising in the quarter. , the central bank’s mission to fight inflation without causing an economic slowdown is complicated.
Markets will focus on Friday’s release of consumer spending data, the Fed’s preferred measure of inflation.
Bond yields soared as traders reacted to economic data. The 10-year Treasury bond rose 5 basis points to 4.706%, its highest level in five months.
“The weak opening of Q1 GDP could cause the Fed to reschedule the start of its rate cutting cycle and restart it in July,” Quincy Crosby, chief global strategist at LPL Financial, said after the GDP report. There is a gender,” he said.
“If tomorrow’s PCE report similarly signals that the downward trajectory of inflation is starting to pick up steam again, that could be a catalyst for markets.”
Meta stocks dragged down the entire tech sector on Thursday, with shares of Facebook’s parent company plunging 15% after the company reported better-than-expected earnings but disappointing guidance.
Here are the U.S. indices immediately after the opening bell at 9:30 a.m. Thursday:
Here’s what else is going on:
In Commodities, Fixed Income and Cryptocurrencies:
- West Texas Intermediate crude oil rose to $82.84 per barrel. Brent crude oil, the international benchmark, rose to 88.05 per barrel.
- Gold rose 0.2% to $2,343.70 an ounce.
- The 10-year Treasury yield rose 5 basis points to 4.706%.
- Bitcoin fell 4% to $63,154.
