The Dow Jones Industrial Average fell 375.12 points, or 0.98%, to 38,085.80 points. The S&P 500 Index fell 23.21 points, or 0.46%, to 5,048.42 points and the NASDAQ Index fell 100.99 points, or 0.64%, to 15,611.76 points.
All stocks in the market fell today. After disclosing the said economic information
The market was also pressured by the 10-year US Treasury yield rising past 4.7% today, hitting its highest level in more than five months.
Investors began to give similar weight to the forecast that The Federal Reserve (Fed) will cut or maintain interest rates at its September meeting. After the US economy expanded lower than expected in the first quarter of 2024 amid high inflation.
CME Group’s latest FedWatch Tool indicates that investors give 44.9% weight to the Fed to cut interest rates by 0.25% to 5.00-5.25% at the September 17-18 meeting, after giving 46.4% weight yesterday. this
Moreover, investors gave 40.8% weight to the Fed to maintain interest rates at 5.25-5.50% at its September 17-18 meeting, after giving it just 30.2% weight yesterday.
Experts stated that The gross domestic product (GDP) figures for the 1st quarter of 2024 were released today. This is considered bad news for investors. This is because the United States has had a disappointing economic expansion. Meanwhile, inflation continues to surge.
The US Commerce Department revealed that the US economy grew less than expected in the first quarter of 2024 amid high inflation.
“This report is the worst of both worlds,” with economic growth slowing. Meanwhile, inflationary pressures still appear. The Fed wants to see inflation continue to fall. But the market wants to see the economy expand. and profits of the business sector increase, so if these two matters do not go in the right direction It would be bad news for the market,” Chris Zaccarelli, head of investment at Independent Advisor Alliance, said in the report.
The U.S. Department of Commerce released its first estimate of gross domestic product (GDP) for the first quarter of 2024 today, indicating that the U.S. economy grew 1.6% in the quarter. Lower than analysts’ expectations of 2.4%.
US economic growth in 1Q24 was affected by a slowdown in consumer spending.
In 2023, the US economy expanded by 2.2%, 2.1%, 4.9%, and 3.4% in the 1st, 2nd, 3rd, and 4th quarters, 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 a 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 by 2Q2024 sales forecasts.
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 be keeping an eye on the Personal Consumption Expenditures (PCE) Price Index on Friday.
Analysts expect the Headline PCE Index, which includes food and energy categories, to increase 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.
Tags: Dow Jones falls points stocks plummet GDPrising inflation
