Wall Street suffers a double blow in Thursday’s session, as softer-than-expected revenue forecasts from Meta Platforms Inc. (NASDAQ: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. (NYSE:NEM). The VanEck Gold Miners ETF (NYSE: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 (CRYPTO: BTC) 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.
Thursday’s Performance In Major US Indices, ETFs
| Major Indices | Price | 1-day %chg |
| S&P 500 | 5,026.87 | -0.9% |
| Russell 2000 | 1,975.61 | -1.0% |
| Nasdaq 100 | 17,333.65 | -1.1% |
| Dow Jones | 37,923.49 | -1.4% |
Thursday’s 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. (NASDAQ:IBM) down 9%, Service Now Inc. (NYSE:NOW) down 5%, Lam Research Corp. (NASDAQ:LRCX) up 2.9%, Chipotle Mexican Grill Inc. (NYSE:CMG) up 5.4%, Ford Motor Co. (NYSE:F) down 1.6%, United Rentals Inc. (NYSE:URI) up 5.5%, with all of them reporting Wednesday after the close.
- Reporting Thursday in the pre-market, Merck & Company Inc. (NYSE:MRK) up 2.5%, Caterpillar Inc. (NYSE:CAT) down 6.6%, Comcast Corp. (NASDAQ:CMCSA) down 6%, Union Pacific Corp. (NYSE:UNP) up 4.3%, S&P Global Inc. (NYSE:SPGI) flat, Honeywell International Inc. (NASDAQ:HON), down 1.4%, Southern Copper Corp. (NYSE:SCCO) up 1.7%, Altria Group Inc. (NYSE:MO) up 1%, Valero Energy Corp. (NYSE:VLO) down 0.5%, Carrier Global Corp. (NYSE:CARR) up 8% and Astrazeneca plc (NASDAQ:AZN) up 5.7%.
- Notable names reporting after the close include Alphabet Inc. (NASDAQ:GOOGL) , Boyd Gaming Corporation (NYSE:BYD), Capital One Financial Corporation (NYSE:COF), Gilead Sciences, Inc. (NASDAQ:GILD), Intel Corp. (NASDAQ:INTC), Juniper Networks, Inc. (NYSE:JNPR), KLA Corp. (NASDAQ:KLAC), Microsoft Corp. (NYSE:MSFT), Roku, Inc. (NASDAQ:ROKU), Teladoc Health, Inc. (NYSE:TDOC), T-Mobile US, Inc. (NASDAQ:TMUS) and Western Digital Corporation (NASDAQ:WDC).
Read now: Fed’s Inflation Report Looms This Friday: What Makes It So Crucial For Markets?
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