HoonSmart.com>> The US stock market, 3 major indices closed lower. The Dow Jones fell 375 points after US economic data for the first quarter of 2024 showed that growth had slowed significantly and indicated that inflation had not eased. The market is once again concerned about the economic expansion. He is concerned that the Fed will cut interest rates only once this year. WTI prices rose 76 cents, while European stock markets closed negative.
The Dow Jones Industrial Average (DJIA) closed on April 25, 2024 at 38,085.80 points, down 375.12 points or -0.98%, but recovered from a 500-point drop during trading hours. After the release of US economic data, the latest report shows that growth has slowed sharply and indicates that inflation has not subsided. This brings back concerns about economic expansion.
The Standard & Poor's 500 Index closed at 5,048.42 points, down 23.21 points, or -0.46%.
The Nasdaq index closed at 15,611.76 points, down 100.99 points, or -0.64%.
The US Commerce Department reported the first estimate of GDP for the first quarter of 2024 as expanding by 1.6%, less than the 2.4% that analysts expected.
This comes as a result of the slowdown in consumer spending.
In 2023, the US economy expanded by 2.2%, 2.1%, 4.9%, and 3.4% in the first, second, third, and fourth quarters, respectively.
It also reported that the personal consumption expenditures (PCE) price index for the first quarter of 2024 rose 3.4% from 1.8% in the previous quarter. The core PCE price index, which excludes food and energy categories, rose 3.7% above 2.0% in the fourth quarter of 2023.
Both sets of data raise concerns that inflation remains high and that the Fed may not cut interest rates as quickly as expected. Because when the two data are analyzed together it indicates a stagnant economic situation. Due to slow economic growth and high inflation. This may be another obstacle for policymakers in implementing policies in the coming period.
Following the GDP data, traders lowered their expectations for further monetary policy easing from the Federal Reserve, with CME Group's FedWatch tool pointing to just one rate cut this year.
The 10-year Treasury yield rose to a 2024 high and is approaching 4.7%.
At the same time, the market was also pressured by concerns about shrinking revenue growth from the technology sector. After a lackluster second-quarter 2024 sales forecast for Meta Platforms Inc., the parent company of Facebook and Instagram, the stock price fell 10.5%.
Meta's earnings report raised concerns among investors ahead of the release of other companies' earnings results. In the technology group, Microsoft, Alphabet and Intel will report earnings after the market closes today.
IBM shares fell 9%, Caterpillar shares fell 7%, and both companies reported lower-than-expected quarterly results.
Other economic data announced yesterday included initial claims for unemployment benefits last week from the Labor Department falling by 5,000 to 207,000, less than the 214,000 that analysts had expected.
The National Association of Realtors (NAR) reported that its pending home sales index for March rose 3.4% month over month, higher than analysts' expectations of 0.4%.
Investors are also watching the release of the personal consumption expenditures index. March, which analysts expect to rise 0.3% on a monthly basis.
European stock markets closed lower on weak results from consumer giant Nestlé and Dutch digital payments company Adyen, while sentiment took a hit. After announcing weak economic growth data from the United States, the largest economy in the world.
The STOXX 600 index fell as much as 1.3% on the day.
Industrial products fell 1.8%, dragging down other sectors, with Adyen shares falling 18.4% after first-quarter sales fell short of expectations. Analysts' concerns about imposing fees at record low levels.
Nestlé shares fell 2% after first-quarter sales came in below estimates, pushing the food and beverage group down 1.1%.
The technology sector fell 1%, following a similar decline in the United States after MetaPlatforms noted that high-cost investments in artificial intelligence could take years to break even.
Sentiment was further boosted by data showing the US economy growing at the slowest rate in nearly two years as inflation accelerated. This has fueled speculation that the Fed will not cut interest rates before September.
Hermes shares fell 2.4% as investors took profits. While the company reported a 17% increase in first-quarter sales, shares of LVMH and Richemont fell by 2.8% and 1.2%, respectively, leading the luxury sector to decline by 1.7%.
The STOXX 600 index closed at 502.38 points, down 3.23 points, or -0.64%.
The London Stock Exchange FTSE 100 index closed at 8078.86 points, up 38.48 points, or 0.48%.
The French Stock Exchange CAC-40 index closed at 8,016.65 points, down 75.21 points, or -0.93%.
The German DAX stock market index closed at 17,917.28 points, down 171.42 points, or -0.95%.
West Texas Intermediate crude oil price for June delivery. It rose 76 cents, or 0.92%, to close at $83.57 a barrel. The price of Brent North Sea crude for June delivery rose 99 cents, or 1.12%, to close at $89.01 per barrel.
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