“Dow Jones” falls 500 points after US GDP in Q1 dropped to 1.6%, below expectations – high inflation.

Reporters reported that today (25 April 2024) the Dow Jones index sank more than 500 points after the US economy expanded lower than expected in the first quarter of 2024 amid high inflation. As of 8:33 p.m. Thai time, the average index The Dow Jones Industrial Average was at 37,955.09 points, down 505.83 points or 1.32%.

In addition, the market was also pressured by the rebound in US government bond yields. The yield on the 10-year US Treasury bond rose above 4.7% today, hitting its highest level in more than five months.

The US Department of Commerce released its first estimate for gross domestic product (GDP) for the first quarter of 2024 today, saying the US economy expanded 1.6% in the quarter. Lower than analysts’ expectations of 2.4%.

The expansion of the US economy in 1Q2024 was affected by a slowdown in consumer spending. In 2023, the US economy expanded 2.2%, 2.1%, 4.9% and 3.4% in 1Q20, 2Q24. , 3 and 4 respectively

In addition, the Ministry of Commerce revealed that The Consumer Price Index (CPI) rebounded to 3.4% in 1Q2024, higher than the 1.8% level in 4Q2023, causing investors to worry about high inflation. This will be a factor causing the US Federal Reserve (Fed) to hold interest rates high for longer than expected.

Meanwhile, market trading was affected by the fall in shares of Meta Platforms Inc., the parent company of Facebook and Instagram.

Meta’s stock price plunged more than 15% after investors were disappointed with sales forecasts for the second quarter of 2024.

The release of Meta’s earnings report raised concerns among investors ahead of other companies’ earnings releases. In the technology sector, Microsoft Corp. and Alphabet Inc. are scheduled to release earnings after the market closes today.

Investors will keep an eye on the Personal Consumption Expenditures (PCE) price index tomorrow.

Meanwhile, analysts expect that the Headline PCE Index, which includes food and energy categories, rose 2.6% in March year-on-year from 2.5% in February.

On a monthly basis, it is expected that the general PCE index increased 0.3% in March from 0.3% in February.

As for the Core PCE Index (Core PCE), which does not include food and energy categories. It is expected to increase 2.6% in March year-on-year from 2.8% in February.

On a monthly basis, it is expected that the core PCE index increased 0.3% in March from 0.3% in February.