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Wall Street suffers a double blow in Thursdays session, as softer-than-expected revenue forecasts from Meta Platforms Inc. META are being compounded by weaker-than-expected economic growth and higher inflationary pressures last quarter, raising fears of a stagflation phase for the U.S. economy.
The U.S. economy grew by a 1.6% annualized pace in Q1 2024, slowing down sharply from the 3.4% pace in the previous quarter and missing expectations of a growth rate of 2.5%. Inflation, as measured by the Personal Consumption Expenditure (PCE) price index, substantially accelerated from a 1.8% to 3.4% annualized pace, with the underlying measure of core PCE escalating to 3.7%.
The elite group of Magnificent Seven stocks wiped out nearly $300 billion in market value earlier this morning, prior to marginally curbing losses by 1 p.m. in New York.
The S&P 500 and the tech-heavy Nasdaq 100 dropped by 1% and 1.2% respectively, while blue chips in the Dow Jones Industrial Average slightly underperformed, declining by 1.4%.
Meta Platforms experienced a double-digit decline, pulling down both the tech index and the communication services sector, which saw its worst day since late October 2023.
Only a few industries managed to notch gains, with gold miners in the spotlight following stronger-than-expected quarterly results by Newmont Corp. NEM . The VanEck Gold Miners ETF GDX rose 2.7%.
Gold also saw an increase, rising by 0.7%, outperforming both stocks and bonds amid growing signals of stagflation from the economy. Crude oil inched lower, with the West Texas Intermediate (WTI) light crude down 0.4% to $82 a barrel.
Bitcoin BTC/USD held steady around $64,500.
In the bond market, Treasury yields surged, with the policy-sensitive 2-year yields rising to 5% as traders further dialed back expectations of Fed rate cuts. Thursdays Performance In Major US Indices, ETFsMajor IndicesPrice1-day %chgS&P 5005,026.87-0.9%Russell 20001,975.61-1.0%Nasdaq 10017,333.65-1.1%Dow Jones37,923.49-1.4%Updated at 12:55 p.m. EDT Loading… Loading… Thursdays Stock Movers Meta Platforms tanked 11% its worst performance since October 2022 despite beating both earnings and revenue forecasts last quarter, as weaker-than-expected guidance disappointed traders. Other companies reacting to earnings were International Business Machines Corp. IBM down 9%, Service Now Inc. NOW down 5%, Lam Research Corp. LRCX up 2.9%, Chipotle Mexican Grill Inc. CMG up 5.4%, Ford Motor Co. F down 1.6%, United Rentals Inc. URI up 5.5%, with all of them reporting Wednesday after the close. Reporting Thursday in the pre-market, Merck & Company Inc. MRK up 2.5%, Caterpillar Inc. CAT down 6.6%, Comcast Corp. CMCSA down 6%, Union Pacific Corp. UNP up 4.3%, S&P Global Inc. SPGI flat, Honeywell International Inc. HON , down 1.4%, Southern Copper Corp. SCCO up 1.7%, Altria Group Inc. MO up 1%, Valero Energy Corp. VLO down 0.5%, Carrier Global Corp. CARR up 8% and Astrazeneca plc AZN up 5.7%. Notable names reporting after the close include Alphabet Inc. GOOGL , Boyd Gaming Corporation BYD , Capital One Financial Corporation COF , Gilead Sciences, Inc. GILD , Intel Corp. INTC , Juniper Networks, Inc. JNPR , KLA Corp. KLAC , Microsoft Corp. MSFT , Roku, Inc. ROKU , Teladoc Health, Inc. TDOC , T-Mobile US, Inc. TMUS and Western Digital Corporation WDC .
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