The main Wall Street indices They fell this Thursday, April 25, pressured by the Goal dropwhich dragged down the technology companies and caused a sharp jump in Treasury yieldsgiven that new economic data showed a growth slowdownbut one stiffer inflationwhich forced the investors to postpone hopes over a first rate cut for December.
In this context, the Industrial Average Dow Jones ended in 38,085.80 points, by losing 1%, the S&P 500 was located in the 5,048.42 points, giving up 0.5% and the Nasdaq Composite depreciated 0.6% and reached 15,611.76 points.
Wall Street: Negative economic data dashes hopes of early rate cuts
Traders are startled by a combination of slowdown in economic growth and some disappointing forecasts for the second quarter of the technology giant Meta Platforms. Meanwhile, the Treasury bond yields were affected by the decreasing chances of rate cuts before signs of persistent inflation.
The US economy grew only 1.6% in the first quarteron an annualized basis, significantly slower than expected, while an underlying measure of inflation surprised to the upside in the first quarter, rising 3.7%.
Weaker growth but strong inflation generated stagflation fearsalthough some economists noted that the Growth was not as weak as the report suggested.
The official data will be published on Friday before the price index data PCEwidely considered the “Federal Reserve’s favorite inflation indicator”.
Wall Street: the fall of Meta and IBM drags down their technological peers
The actions of Meta Platforms Inc. fell 11% up to a minimum of almost three months, after the Facebook matrix forecast weaker-than-expected revenue for the second quarter, due to a increased spending on artificial intelligence.
The forecasts largely offset better-than-expected first-quarter results and set a rigid tone for upcoming results from the company’s key technology peers, namely Microsoft and Alphabetwhich will be published after the market closing bell.
UBS (Union Bank of Switzerland) suggested that the decline in Meta would be limitednoting the company’s “potential for better-than-expected advertising revenue growth, given the higher ad load of reelsas well as eCPM growth (metric used to measure an app developer’s ad monetization performance or to measure revenue).
IBM fell 9% due to weak first quarter resultswhile the company also announced a $6.4 billion deal to buy Hashicorp. The deal “makes sense strategically to enhance IBM’s software portfolio and fits with Red Hat’s/infrastructure focus,” according to BMO Research.
Meanwhile, the actions of Caterpillar fell 7% after the road machinery maker reported a mixed first quarter of 2024, with earnings that exceeded expectations of the analysts, but with income that remained precarious.
ford gained 0.3%, reporting stronger first-quarter earnings and positive free cash flow guidance; poor performance in your business electric vehicles was offset by stronger performance in its business.
Chipotle Mexican Grill added 6.5% after beat expectations with its first quarter earningsdriven by the increase in the price of their menu items.
Rubrik Inc. jumped nearly 20% in its market debut, opening at $38.60, after pricing the IPO at $32 per share.
Source: Ambito
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