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Stocks fell on Thursday after a sharply lower-than-expected reading on US GDP for the first quarter ratcheted up questions about the health of the US economy.
The Nasdaq Composite (^IXIC) fell about 0.6%. The S&P 500 (^GSPC) lost around 0.5%, while the Dow Jones Industrial Average (^DJI) slipped about 1%, or nearly 400 points. The indexes did recover from steeper losses earlier in the session.
US GDP growth came in at a 1.6% annualized pace in the first quarter, a government report said, falling well short of expectations of 2.5%. Meanwhile, an underlying measure of inflation grew by 3.7% in the first quarter, the report showed, above estimates and significantly higher than a 2% gain in the prior quarter. The readings came amid ongoing debate about the path of the Federal Reserve’s interest rate campaign.
Treasury yields rose after the print, with the benchmark 10-year yield (^TNX) surging to its highest levels of the year before hovering around 4.7%.
Meanwhile, Meta (META) shares sank more than 10% as the market balked at rising costs at the Facebook and Instagram owner, which plans to spend up to $10 billion on AI infrastructure investments. Results from other Big Tech companies after the bell on Thursday appeared to calm any concern that Meta’s disappointment will be a theme throughout the sector.
Shares of Alphabet (GOOG, GOOGL) soared more than 10% in extended trade as the company’s results topped Wall Street’s expectations. The search giant also announced its first-ever quarterly cash dividend and expanded its stock repurchase program by an additional $70 billion. Meanwhile, Microsoft (MSFT) shares rose as much as 5% after the company topped Wall Street’s estimates for both revenue and earnings per share.
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