Home Stock market today: Dow, S&P 500, Nasdaq fall on bleak GDP, jobs data with Big Tech earnings on deck

Stock market today: Dow, S&P 500, Nasdaq fall on bleak GDP, jobs data with Big Tech earnings on deck

  • An update on gross domestic product (GDP) showed a sharp drop in growth with the US economy contracting at an annual rate of 0.3% in the first quarter, according to an advanced estimate released by the US Bureau of Economic Analysis on Wednesday.
  • It was the first negative reading in three years. Economists had expected a drop to 0.1% growth. In the fourth quarter of 2024, real GDP increased 2.4%.
  • The decrease primarily reflected an increase in imports as Trump’s tariff push rattled confidence and businesses rushed to stockpile.
  • Along with an uptick in imports, the BEA said a deceleration in consumer spending and a downtick in government spending also added pressure to the reading. Compared to the fourth quarter, these were partly offset by upturns in investment and exports.
  • Pricing pressures also escalated.
  • The personal consumption expenditures (PCE) price index increased 3.6%, compared to an increase of 2.4% in the prior quarter. Excluding food and energy prices, the PCE price index jumped 3.5%, an acceleration from the 2.6% increase in Q4.
  • Read more here.
  • ADP’s read on private payroll growth in April showed a pullback in hiring amid what the report called a “difficult” environment defined by an “unease” among businesses.
  • The report showed private payrolls rose by 62,000 in April, fewer than forecast by economists.
  • Stock futures fell following the report, with Nasdaq futures off more than 1% to lead losses.
  • “Unease is the word of the day. Employers are trying to reconcile policy and consumer uncertainty with a run of mostly positive economic data,” said Nela Richardson, chief economist at ADP. “It can be difficult to make hiring decisions in such an environment.”
  • Humana stock (HUM) jumped 5% premarket after the health insurer reported mixed first quarter results and reaffirmed its full-year guidance.
  • Investors were watching Humana after UnitedHealth Group (UNH) reported higher-than-expected medical costs in its Medicare Advantage business, which caused the stock to crash on April 17.
  • Humana noted in its earnings that its Medicare Advantage costs were in line with expectations and that the government-funded private health insurance business was “performing as expected.”
  • The company beat on adjusted earnings per share of $11.58, compared to Wall Street’s estimates of $10.09. Revenue came in at a slight miss of $32.11 billion, just under the consensus of $32.15 billion.
  • Read more here.
  • Caterpillar (CAT) reported first quarter earnings that missed Wall Street’s expectations Wednesday, as sales fell across all its segments and demand for construction equipment weakened in the quarter.
  • The industrial company also laid out two different scenarios for its annual forecast, one accounting for a tariff impact and one excluding that impact.
  • The forecast that excluded tariffs showed an improvement from its previous outlook, which sent the stock more than 3% in premarket trading.
  • As for the tariff impact, Caterpillar said it expects $250 million and $350 million in additional tariff-related costs in its second quarter.
  • As Yahoo Finance’s Dani Romero reported yesterday, construction job openings fell in March as developers hesitated to move forward with new projects since President Trump’s across-the-board tariff announcements. Overall, Caterpillar stock has had a tough year so far and is down 15% year to date.
  • Read more here.
  • Earnings: Microsoft (MSFT), Meta (META), ADP (ADP), Albermarle (ALB), Caterpillar (CAT), Generac (GNRC), GE HealthCare (GEHC), Humana (HUM), Hess (HES), Qualcomm (QCOM), Robinhood (HOOD)
  • Economic data: MBA Mortgage Applications (week ending April 25); ADP employment change (April); GDP annualized (first quarter advance estimate); Personal consumption (first quarter advance estimate); Employment cost index (first quarter); Personal spending (March); Personal income (March) MNI Chicago PMI (April); PCE price index; Pending home sales (March)
  • Here are some of the biggest stories you may have missed overnight and early this morning:
  • M&A accelerates worldwide, but not in US in new Trump era
  • China creates list of US goods spared from 125% tariffs
  • The US economy may have avoided a recession so far. Here’s how that could change.
  • Starbucks slides as sales slump, CEO points to turnaround plan
  • House Republicans plan to defund the CFPB
  • Super Micro stock sinks as AI server maker slashes profit forecast
  • Stellantis suspends guidance, to reassess capex due to US tariffs
  • Corporate earnings paint 2 different pictures of the US consumer
  • Trump officials eye changes to Biden’s AI chip export rule
  • Old wisdom of ‘sell in May’ back in focus as stock market churns
  • Super Micro Computer’s (SMCI) cuts to revenue and profit expectations are rattling nerves about prospects for AI-linked spending ahead of Big Tech’s moment of earnings truth.
  • The AI server maker’s customers have unexpectedly pushed back procurement decisions from the third quarter to the fourth, prompting the company to slash its sales guidance to $4.5 billion to $4.6 billion, down from the prior $5 billion to $6 billion.
  • Shares in Super Micro tumbled almost 16% in premarket trading after the disappointing preliminary results.
  • The AI jitters spread to chipmakers Nvidia (NVDA) and AMD (AMD), which saw their stock slip about 2% and 1%, respectively. Meanwhile, shares in server rivals Dell (DELL) and HPE (HPE) also retreated.
  • Reuters reports:
  • Read more here.
  • Oil prices are on track to post their worst monthly performance for April, as mounting concerns over a slowing global economy—fueled by the ongoing U.S.-led trade tensions—dampen outlook for energy demand.
  • Bloomberg reports:
  • Read more here.
  • Starbucks (SBUX)
  • The stock in the coffee shop franchise dropped as much as 6.7% in extended trading as the Q2 earnings report disappointed Wall Street and lost investor faith in the new CEO. The company has also faltered in its Chinese expansion, with customer visits up but per-customer spending declining.
  • Super Micro Computer (SMCI)
  • Shares in server giant Super Micro Computer plummeted 15% in after-hours trading. The drop occurred after the company released disappointing preliminary third quarter results, citing delayed customer platform decisions moving sales into the fourth quarter.
  • Seagate (STX)
  • Seagate Technology stock jumped over 8.9% after the data storage provider released positive guidance for Q4, pointing towards revenue of $2.40 billion and adjusted earnings of $2.40 per share.

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