2024-04-25 14:23:31
Journalists reported that today (April 25, 2024), the Dow Jones index fell more than 500 points following the US economy grew less than expected in the first quarter of 2024 amid inflation high. Jones Industrial Average was at 37,955.09 points, down 505.83 points or 1.32%.
In addition, the market was also put under pressure by the rebound in US government bond yields. The yield on the 10-year U.S. Treasury note rose above 4.7% today, hitting its highest level in more than five months.
The U.S. Department of Commerce today released its first estimate of gross domestic product (GDP) for the first quarter of 2024, saying the U.S. economy grew 1.6% during the quarter. Below analysts’ expectations of 2.4%.
The expansion of the US economy in 1Q2024 was affected by a slowdown in consumer spending. In 2023, the US economy grew by 2.2%, 2.1%, 4.9% and 3.4% in 1Q20, 2Q24, 3 and 4 respectively.
In addition, the Ministry of Commerce revealed that the Consumer Price Index (CPI) rebounded to 3.4% in 1Q2024, higher than the level of 1.8% in 4Q2023, encouraging investors to worry regarding high inflation. This will be a factor that will cause the US Federal Reserve (Fed) to maintain its high interest rates for longer than expected.
At the same time, market trading was affected by falling shares of Meta Platforms Inc., the parent company of Facebook and Instagram.
Meta’s stock price plunged more than 15% following investors were disappointed by sales forecasts for the second quarter of 2024.
The release of Meta’s earnings report sparked concerns among investors ahead of other companies’ earnings releases. In the technology sector, Microsoft Corp. and Alphabet Inc. are expected to report results following the market close today.
Investors will keep an eye on the Personal Consumer Expenditures (PCE) Price Index tomorrow.
At the same time, analysts expect the overall PCE index, which includes food and energy categories, to have risen 2.6% in March year-on-year, up from 2.5% in February.
On a monthly basis, the general PCE index is expected to have increased by 0.3% in March compared to 0.3% in February.
As for the Core PCE Index (Core PCE), which does not include food and energy categories. It is expected to increase by 2.6% in March year-on-year, compared to 2.8% in February.
On a monthly basis, the core PCE index is expected to have increased by 0.3% in March compared to 0.3% in February.
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