US stocks took a tumble on Thursday as new data revealed that the US economy grew at a slower pace than expected in the first quarter of 2024. The Bureau of Economic Analysis reported that the GDP only increased by 1.6% on an annualized basis, falling short of the anticipated 2.4% growth.
This disappointing economic news has raised concerns among investors about the Federal Reserve’s upcoming rate-cut decision. The report also showed a rise in consumer prices during the quarter, adding complexity to the central bank’s efforts to combat inflation without stalling economic growth.
The reaction was swift in the bond market, with the US 10-year Treasury yield spiking to its highest level in five months at 4.706%. Traders are closely monitoring the upcoming release of personal consumption expenditures data, which will provide further insight into inflation trends.
Tech stocks were hit particularly hard on Thursday, with Meta (formerly Facebook) shares plummeting 15% after the company reported strong earnings but issued disappointing guidance. The broader tech sector felt the impact of Meta’s decline.
As the market opened on Thursday morning, US indexes were in the red. In commodities, West Texas Intermediate crude oil rose to $82.84 a barrel, while gold prices edged up to $2,343.70 an ounce. Bitcoin, however, experienced a 4% drop to $63,154.
Investors will be keeping a close eye on upcoming economic data and Fed announcements as they navigate the uncertain market conditions following the latest GDP report.
