Source: Sharecast
Making headlines was the news that the American economy unexpectedly contracted in the first quarter. And with the impact of tariffs likely to be felt from April onwards, odds of a US recession have risen.
“There’s that feeling in your gut and then there’s seeing it in black and white. For investors, the cold hard data that showed the US economy contracted over the first three months of the year was a bit like realising you’ve been sat in a bath for too long," said AJ Bell's head of financial analysis Danni Hewson.
"You knew things were getting chilly but you kind of hoped someone would turn on the hot tap before it got too cold."
US GDP fell at an annualised rate of 0.3% in the first quarter, according to preliminary estimates from the Bureau of Economic Analysis. This was the first year-on-year decline since the start of 2022 and a sharp reversal from the 2.4% growth seen in the fourth quarter. Economists had expected GDP to grow by 0.3%.
While trading in the red for most of the session, a late rally pushed the S&P 500 up 0.2% to 5,569.06. After an 8% gain over the past seven trading days, the index is now within a whisker of its pre-Liberation Day levels.
The Dow, meanwhile, rose 0.4% to 40,669.36, while the Nasdaq slipped 0.1% to 17,446.34. The subdued performance could also have been linked to cautiousness ahead of a flurry of Big Tech earnings, kicking off with Meta Platforms and Microsoft, due to report after the closing bell.
Economic data barrage
Mortgage applications fell 4.2% in the week ended 25 April, according to the Mortgage Bankers Association of America, extending the previous week's 12.7% drop, which was the sharpest in six months. Pending home sales decreased by 0.6% year-on-year in March, according to the National Association of Realtors, but were up 6.10% month-on-month.
Private sector payrolls rose by 62,000 for the month, the smallest gain since July 2024 and down from 147,000 in March. Consensus estimates had been for an increase of 120,000.
The closely watched personal consumption expenditures price index rose 2.3% year-on-year in March, down from February's 2.7% increase. Excluding volatile food and energy prices, the PCE price index increased 2.6% from a year earlier.
Still on data, the Institute for Supply Management's Chicago purchasing managers' index fell to 44.6 in April, down from 47.6 in the prior month and slightly below analysts' expectations of 45.5. April's decrease marked a 17th consecutive monthly decline.
Market movers
Starbucks posted quarterly revenue and earnings that fell short of expectations, causing shares to drop 4%. The global chain also warned of the impact from tariffs and volatile coffee prices.
Profits at heavy equipment manufacturer Caterpillar fell in the first quarter as a result of weaker volumes and pricing, with results coming in worse than expectations. However, the stock edged higher following a 15% slump so far this year.
Etsy shares dropped despite the marketplace beating revenue forecasts in the first quarter as the company swung to a net loss and took a $101.7m impairment charge from the sale of its musical instrument platform Reverb.
Shares in biopharma firm Regulus more than doubled after Swiss giant Novartis announced plans to buy the company for $1.7bn, offering shareholders $7 a share upfront and $7 a share at a later date if certain regulatory milestones are achieved. Regulus's stock closed Tuesday at just $3.37.
Dow Jones - Risers
Amgen Inc. (AMGN) $290.92 2.69%
Verizon Communications Inc. (VZ) $44.06 2.58%
McDonald's Corp. (MCD) $319.65 1.64%
Cisco Systems Inc. (CSCO) $57.73 1.63%
Apple Inc. (AAPL) $212.50 1.41%
Walmart Inc. (WMT) $97.25 1.26%
Visa Inc. (V) $345.50 1.17%
International Business Machines Corporation (CDI) (IBM) $241.82 1.02%
Microsoft Corp. (MSFT) $395.26 0.91%
Boeing Co. (BA) $183.24 0.68%
Dow Jones - Fallers
Chevron Corp. (CVX) $136.06 -2.33%
Intel Corp. (INTC) $20.10 -2.00%
Nike Inc. (NKE) $56.40 -1.98%
Walgreens Boots Alliance, Inc. (WBA) $10.97 -0.36%
Goldman Sachs Group Inc. (GS) $547.26 -0.25%
Walt Disney Co. (DIS) $91.00 -0.24%
American Express Co. (AXP) $266.41 -0.23%
Dow Chemical Co. (DOW) $30.60 -0.20%
S&P 500 - Risers
Qorvo, Inc. (QRVO) $71.67 13.51%
Seagate Technology Plc (STX) $91.03 10.80%
Sba Communications Corp. (SBAC) $243.40 9.01%
Western Digital Corp. (WDC) $43.86 7.39%
Brighthouse Financial, Inc. (BHF) $58.22 7.15%
Incyte Corp. (INCY) $62.66 6.98%
Vulcan Materials Co. (VMC) $262.75 6.92%
Regeneron Pharmaceuticals Inc. (REGN) $598.76 6.31%
PACCAR Inc. (PCAR) $90.21 6.14%
Nektar Therapeutics (NKTR) $0.80 6.09%
S&P 500 - Fallers
Edison International (EIX) $53.51 -8.89%
Norwegian Cruise Line Holdings Ltd (NCLH) $16.05 -7.77%
ONEOK Inc. (OKE) $82.12 -6.49%
Helmerich & Payne Inc. (HP) $18.88 -4.84%
Starbucks Corp. (SBUX) $80.05 -4.33%
Apache Corp. (APA) $15.54 -4.25%
Diamondback Energy Inc. (FANG) $132.01 -4.22%
Hanesbrands Inc. (HBI) $4.59 -4.18%
International Paper Co. (IP) $45.50 -4.09%
Foot Locker Inc. (FL) $12.28 -4.07%
Nasdaq 100 - Risers
Seagate Technology Plc (STX) $91.03 10.80%
Western Digital Corp. (WDC) $43.86 7.39%
Incyte Corp. (INCY) $62.66 6.98%
Regeneron Pharmaceuticals Inc. (REGN) $598.76 6.31%
PACCAR Inc. (PCAR) $90.21 6.14%
Mercadolibre Inc. (MELI) $2,330.85 5.55%
Mondelez International Inc. (MDLZ) $68.13 4.85%
Booking Holdings Inc. (BKNG) $5,099.28 4.28%
T-Mobile Us, Inc. (TMUS) $246.95 3.84%
Skyworks Solutions Inc. (SWKS) $64.28 3.49%
Nasdaq 100 - Fallers
Starbucks Corp. (SBUX) $80.05 -4.33%
Expedia Group Inc. (EXPE) $156.93 -2.67%
Align Technology Inc. (ALGN) $173.30 -2.16%
Intel Corp. (INTC) $20.10 -2.00%
Baidu Inc. (BIDU) $87.82 -1.94%
Wynn Resorts Ltd. (WYNN) $80.31 -1.81%
Electronic Arts Inc. (EA) $145.09 -1.19%
Alphabet Inc. Class A (GOOGL) $158.80 -1.13%
Sirius XM Holdings Inc (SIRI) $21.40 -1.02%
Qvc Group Inc Series A (QVCGA) $0.15 -0.99%