U.S. data released on Thursday hit hopes of a soft landing hard: GDP grew by 1.6% on an annualized quarterly basis in the first quarter, the lowest in nearly two years, less than half of the growth rate in the fourth quarter of last year, and slower than the market expectation of 2.5% growth, personal spending, the engine of economic growth, rose 2.5% in the first quarter, also at a slower pace than expected, and the GDP report also released that the core PCE price index, the Fed's favored inflation measure, rose by 3.7% in the first quarter , which was almost double the growth rate in the fourth quarter, and the number of initial jobless claims fell to a two-month low last week instead of picking up as expected.
Data showed unexpectedly weak economic growth, stubbornly high core inflation, a still strong labor market, heightened stagflation fears, and a more uncertain Fed interest rate outlook that is more likely to delay rate cuts, further dampening the prospect of rate cuts. The Fed wants to see inflation start to come down consistently, while the market wants to see economic growth and corporate profits increase, and if the data doesn't meet either side, that's bad news for the market.
After the release of pre-market GDP and other data of U.S. stocks, the pricing of swap contracts showed that the Fed's interest rate cut expected by investors this year had fallen to about 33 basis points, which means that there was only one 25 basis point interest rate cut, far lower than the more than six interest rate cuts expected at the beginning of this year; U.S. Treasury bond prices dived, and the yield rose by more than 10 basis points from the daily low to a new high in more than five months, the yield on the benchmark 10-year U.S. Treasury bond rose above 4.70% intraday for the first time in more than five months, and the yield on the interest-sensitive two-year U.S. Treasury note regained 5.0%; The U.S. dollar index quickly turned higher and refreshed its daily high, breaking away from a new two-week low set earlier in the day, but the rally did not last, and U.S. stocks returned to the decline in early trading.
Expectations of interest rate cuts have been hit, tech giants have reported poor results, and major U.S. stock indexes have opened sharply lower across the board. Meta gapped-down more than 10% lower than expected after announcing second-quarter revenue guidance and spending as much as $10 billion on AI-related investments this year, CEO Zuckerberg warned that it would take some years to profit from generative AI, leading the S&P and Nasdaq constituents, and after announcing lower-than-expected first-quarter revenue and stagnant year-on-year revenue growth from major business consulting, IBM fell 10% intraday, reporting first-quarter revenue that was lower than expected and warning of a slowdown in growth in the second quarter. Construction machinery giant Caterpillar fell more than 9% at the beginning of the session after it is expected to continue to be weak in the Asia-Pacific region and Europe outside China, becoming the two major drivers of the Dow's decline.
However, some blue-chip stocks bucked the market and rose higher, supporting the major stock indexes to bottom out and rebound intraday. Tesla, which rekindled hopes of producing low-priced cars when it announced its earnings report, maintained its gains after Wednesday's rally; chip stocks rose overall, with Nvidia diving on Wednesday rebounding more than 5% from a daily low, and Evercore ISI's latest report reiterated Nvidia's outperform rating, suggesting that it seize all the opportunities of the stock to weaken and buy the bottom. Pharmaceutical giant Merck, whose earnings and revenue were stronger than expected in the first quarter, rose more than 4% intraday, leading the way in curbing the Dow's decline. Newmont, the world's largest gold miner, rose more than 10% in first-quarter profits that were higher than expected, and the materials sector, where mining stocks are located, rose against the market. After hours, Microsoft and Google's parent company announced first-quarter results that were better than expected, and Google also announced its first dividend in history, and the stock price quickly stopped falling and rose more than 10% after hours, which is bound to support the market rebound on Friday. And Intel's second-quarter guidance was worse than expected, and Intel dived after hours and turned down.
In the currency market, the Eurozone and UK PMIs were better than expected while the US GDP was weak, the euro and the pound were both against the dollar, and the yen continued to hit a new low against the dollar this week, after falling below the key level of 155 on Wednesday, and further tested 156. Commentators say that the yen's repeated 34-year lows may force BOJ Governor Kazuo Ueda to be more hawkish in his stance after Friday's meeting, as he tries to maintain the path of exiting ultra-loose without hitting the yen. Bitcoin continued to rebound after U.S. GDP, briefly regaining $65,000, up more than $2,000 from a nearly one-week low earlier in the day.
Among the commodities, gold fell back after the announcement of U.S. GDP, but U.S. stocks rose in early trading, spot gold rose more than 1% in the day, and New York gold futures rebounded more than 1% from the daily low, all of which smoothed out the previous two days of decline back to Monday's level, and gold futures will come out of the closing low level in nearly three weeks. The World Bank's recent report predicts that gold will continue to be disconnected from rising U.S. Treasury yields after rising about 4% in the first quarter, rising about 8% for the year, supported by geopolitical and policy uncertainty in many elections around the world this year.
After the release of the weak U.S. GDP, international crude oil turned lower intraday, but has since rebounded and maintained the rally until the close, getting rid of the danger of hitting a new low in a month and standing at a high level in more than a week. The rebound in oil prices is partly due to the renewed risk of supply disruptions in the Middle East due to Israel's actions in the Gaza Strip, as well as U.S. Treasury Secretary Janet Yellen's statement that the domestic economy is still performing very well, and that GDP growth will be revised upward in the first quarter after more data is released. According to Xinhua News Agency, Israeli media said that Israeli Prime Minister Benjamin Netanyahu approved a plan to carry out a ground operation in the southern city of Rafah in the Gaza Strip, and CCTV quoted Israeli media as saying that the Israel Defense Forces deployed dozens of tanks and armored vehicles on the southern border near Gaza.
The S&P Nasdaq stopped three consecutive yangs, Meta recorded the biggest decline in two years, IBM, Caterpillar, and Intel fell sharply after the earnings report, and Google and Microsoft turned up
The three major U.S. stock indexes collectively opened lower for the first time this week, narrowing more than half of their early losses at midday. The Nasdaq Composite Index fell more than 2% at the beginning of the session, narrowing its decline to less than 2% in early trading, and the S&P 500 fell about 1.6% in early trading and fell less than 1% at midday. The Dow Jones Industrial Average fell just over 700 points, or more than 1.8%, in early trading, and narrowed its decline to less than 400 points in midday trading, also falling less than 1%. In the end, the three major indexes collectively closed down for the first time this week, with the S&P and Nasdaq halting a three-day winning streak, and the Dow falling for two consecutive days after a four-day winning streak.
The S&P closed down 0.46% at 5,048.42, bidding farewell to Tuesday's closing high since April 12. The Nasdaq closed down 0.64% at 15,611.76 points, still far from the low level set last Friday since January 31, and is expected to gain this week. The Dow closed down 375.12 points, or 0.98%, at 38,085.80, continuing to fall from Tuesday's closing high since April 9.
The tech-heavy Nasdaq 100 index fell 2% at the start of the session to close down 0.55%, failing to continue to move off its low level since January 18 after rebounding for three consecutive days. The Nasdaq Technology Market Cap Weighted Index (NDXTMC), which measures the performance of the technology constituents of the Nasdaq 100 index, fell more than 3% at the beginning of the session to close down 0.63%, failing to continue to move back from its lowest level since Feb. 21 last Friday. The Russell 2000, a small-cap index dominated by value stocks, fell as much as 1.9% in early trading to close down 0.72%, retreating for two consecutive days after three consecutive gains on Tuesday to its highest level since April 12.
Among the components of the Dow Jones, IBM, which announced its earnings report, fell by far ahead, falling 10% in early trading and closing down nearly 8.3%, Caterpillar, which fell more than 9% at the beginning of the session after the earnings report, closed down 7%, Microsoft fell third, Honeywell, whose revenue was higher than expected in the first quarter and maintained its full-year guidance, still closed down 0.9%, and among the few rising constituents, Merck, which rose nearly 4.6% at the beginning of the session, closed up 2.9% to lead the gains, and Intel, Boeing, Unitedhealth, and Chevron, the only energy stock, rose more than 1% at the close.
Among the major sectors of the S&P 500, a total of six closed down on Thursday, with Meta's communication services falling about 4% to lead the decline, the second largest decliner, healthcare only fell more than 0.6%, and Tesla's consumer discretionary fell 0.2%, the smallest decline. Among the five sectors that closed higher, materials rose about 0.7%, energy rose 0.5%, utilities and industrials rose nearly 0.3%, and Nvidia's IT, which rose nearly 0.2%.
Including Microsoft, Apple, Nvidia, Google's parent company Alphabet, Amazon, Facebook's parent company Meta, and Tesla, among the tech giants "Seven Sisters", some rose in early trading. Tesla, which rose 12% on Wednesday, quickly turned up after falling more than 2% at the beginning of the session, closing up nearly 5%, rising for three consecutive days, and refreshing the closing high since April 12 two days after the announcement of the earnings report.
Meta, which announced its earnings report, fell 16% at the beginning of the session, and then narrowed its decline, closing down about 10.6%, the largest closing decline since February 3, 2022, falling for two consecutive days to the lowest closing level since February 1, turning up and rising more than 1% after hours; Microsoft and Alphabet, which will announce their earnings after trading on Thursday, both fell more than 5% at the beginning of the session, and Microsoft closed down nearly 2.5% , after three consecutive days of rising back to the low level since January 31, after the announcement of the earnings report, it rose more than 5% after the market, Alphabet closed down nearly 2%, fell to the record high of the closing record set by the three-day rise, and rose more than 10% after the announcement of the financial report; Amazon fell 5.8% at the beginning of the session, closed down nearly 1.7%, fell for two consecutive days, refreshed the low closing level since March 11, and rose more than 4% after hours; while Apple closed up 0.5%, is expected to rise for four consecutive days to the closing high since April 15; Netflin fell 1.7% at the beginning of the day It turned higher in early trading and closed up 1.7%, not continuing to approach the closing low since February 13, which was refreshed on Monday.
Chip stocks generally rose against the market and outperformed the market, with the Philadelphia Semiconductor Index and the semiconductor industry ETF SOXX turning higher at the beginning of the session, closing up nearly 2% and 1.9% respectively, rising for four consecutive days to close at a high level since last Tuesday, April 16. Among chip stocks, Nvidia, which closed down more than 3% after diving on Wednesday, fell more than 1.8% at the beginning of the session, and then quickly turned up, closing up more than 3.7% and rebounding 5.6% from the daily low, not close to the closing low since February 21 set by the 10% plunge on Friday; Broadcom closed up 3%; AMD closed up more than 1% in early trading, TSMC U.S. stocks closed up nearly 3% in early trading; Arm, which fell more than 4% at the beginning of the session, closed down nearly 2%; Intel closed up nearly 1.8%, but after the announcement of the earnings report, it fell 9% after hours.
AI concept stocks were mixed, turning up or narrowing their losses during the session. At the close, the ultra-micro computer (SMCI), which turned higher in early trading, rose more than 4%, the SoundHound.ai (SOUN), which turned higher in early trading, rose 3.7%, and Palantir (PLTR), which fell more than 4% at the beginning of the session, rose nearly 0.6%, Astera Labs (ALAB), known as "Little Nvidia" and sells data center interconnect chips, closed up nearly 0.9% after midday trading, while C3.ai (AI) fell nearly 0.9%. BigBear.ai (BBAI) fell nearly 1.8%, while Adobe (ADBE) and Oracle (ORCL) fell nearly 0.8% and 0.4%, respectively.
Popular Chinese concept stocks were mixed. The Nasdaq Golden Dragon China Index (HXC) fell more than 0.9% at the beginning of the session, and closed up nearly 0.8% after turning higher in early trading, outperforming the market for four consecutive days, and refreshing the closing high since April 11 on the fourth and second days. Chinese ETF KWEB closed up nearly 0.2%, and CQQQ closed down nearly 0.2%. The new car-making forces fell intraday, and the performance was mixed at the close, with Li Auto falling nearly 1.7%, Weilai Automobile, which fell nearly 3% at the beginning of the session, falling more than 0.2%, Xiaopeng Motors closing flat, and Xiaomi powder rising less than 0.1%. Among other stocks, at the close, JD.com rose more than 1%, Alibaba and Baidu rose about 0.6% and 0.7% respectively after rising in early trading, and NetEase, which turned up at midday, rose 0.1%, while Station B fell 2%, Pinduoduo fell more than 1%, and Tencent fell nearly 1%.
Among the stocks that reported earnings reports, Southwest Airlines (LUV) closed down nearly 7% after first-quarter revenue fell short of expectations, higher-than-expected losses, and management warned of delays in Boeing aircraft deliveries and lowered its growth guidance for next year, home appliance maker Whirlpool (WHR) closed down 10.1% after reporting higher-than-expected revenue and earnings but laying off 1,000 jobs due to stagnant U.S. market demand, and ServiceNow (NOW), a digital workflow company that reported first-quarter revenue slightly higher than expected, closed down 4%. Despite better-than-expected first-quarter revenue and earnings, blood glucose monitoring system maker Dexcom (DXCM) fell as much as 8% in after-hours trading.
Newmont (NEM), the world's largest gold miner, closed up 12.5% after a better-than-expected first-quarter net profit and strong buyer interest in disclosing its plan to divest non-core assets, Churchill Downs (CHDN), a horse racing and casino bookmaker with higher-than-expected first-quarter earnings and revenues, closed up 4.7%, and Chipotle Mexican Grill (CMG), a Mexican-style restaurant chain that made higher-than-expected first-quarter profits, closed up 6.3%. Ford Motor (F), which earned higher-than-expected first-quarter earnings and raised its free cash flow guidance for this year, fell nearly 3% to close up 0.7% at midday, social media Snap (SNAP) rose nearly 30% after after-hours reporting a 21% increase in first-quarter revenue due to improved advertising platforms, and biotech stock Gilead Sciences (GILD) rose nearly 3% after after-hours reporting a lower-than-expected first-quarter loss and higher-than-expected revenue.
Among the more volatile stocks, data management software company Rubrik (RBRK) rose 20.6% at the opening and 15.6% at the end of the NYSE at $32 above the guidance range, while mobile phone parts maker Loar Holdings (LOAR) also rose above the guidance range at $28 and rose more sharply in its debut, closing up 75.7%.
European stocks were also hit by the earnings reports of some companies, and the pan-European stock index fell for two consecutive days. The Euro Stoxx 600 index continued to fall off Tuesday's closing high since April 8. Stock indexes of major European countries fell for the week, German, French and Italian stocks fell for two consecutive days, and British stocks, which ended their five-day winning streak on Wednesday, closed at a record high on the third day of this week.
Among sectors, industrials closed down nearly 1.9%, weighed down 18.4% by Dutch-listed digital payments company Adyen after reporting lower-than-expected first-quarter sales and analysts' concerns about historically low pass-through fees, the personal and housewares sector of luxury giants closed down nearly 1.9%, and among its constituents, Hermès, which saw a 17% jump in first-quarter sales, still fell 2.4%, LVMH and Richemont fell 2.8% and 1.2%, respectively, and the food sector fell about 1% Nestle, the world's largest packaged food company listed in Switzerland, fell 2% after reporting lower-than-expected organic sales growth in the first quarter, the technology sector fell 1%, hit by Meta and other U.S. technology stocks, ASM International (ASMI), which jumped 11% after Wednesday's earnings report, fell 1.4%, while the underlying resources, where mining stocks are located, closed up 1.9% against the market, benefiting from a 16.1% jump in London-listed Anglo American after BHP Billiton bid $38.8 billion on Thursday , supporting the rebound of British stocks.
After the GDP release, U.S. Treasury yields rose more than 10 basis points intraday to hit a five-month high
When the U.S. GDP was announced, the U.S. 10-year benchmark Treasury yield quickly fell below 4.62% and approached 4.61% to refresh the daily low, and then quickly rose above 4.70%, and the U.S. stock market rose above 4.73% before the market, refreshing the high since November 2, 2023, rising more than 9 basis points in the day, rebounding more than 12 basis points from the daily low, and about 4.70% at the end of the bond market, rising about 6 basis points in a day, and rising for two consecutive days after falling for three consecutive days.
Before the GDP announcement, the 2-year U.S. Treasury yield, which is more sensitive to the outlook for interest rates, fell below 4.89% to refresh the daily low in European stocks, and quickly regained 5.0% after the GDP was announced, and the U.S. stock market rose above 5.02% before the market, refreshing the high since November 14, 2023 after rising above 5.0% on Monday, rising nearly 10 basis points in a day, up about 14 basis points from the daily low, and about 5.0% at the end of the bond market, rising more than 7 basis points in a day, and also rising for two consecutive days.
The U.S. dollar index hit a new low in nearly two weeks, and GDP once turned higher Japan hit a new low since 1990 on four consecutive days
The ICE U.S. Dollar Index (DXY), which tracks a basket of six major currencies such as the U.S. dollar against the euro, was close to 105.50 in European stocks, refreshing the low since April 12 for three consecutive days, falling more than 0.3% in the day.
By Thursday's U.S. stock market close, the dollar index was below 105.60, down nearly 0.3% on the day, while the Bloomberg dollar spot index, which tracks the greenback against 10 other currencies, fell less than 0.1% on the day, close to Tuesday's retreat and hit a low since the same period on April 12, and the dollar index both retreated after rebounding on Wednesday.
Among the non-U.S. currencies, the yen hit a new low since 1990 on Thursday, and the U.S. dollar rose above 155.70 against the yen before the European stock market, refreshing the high since 1990 for the fourth consecutive day, up nearly 0.3% in the day, and the U.S. GDP gave up some of the gains after the announcement, falling 155.50, and the U.S. stock closed above 155.60, up nearly 0.2% during the day; EUR/USD fell below 1.0680 before GDP release to refresh daily low, rebounded after the announcement, U.S. stocks had tested 1.0740 at midday, approaching the high since April 11 set by European stocks after the intraday rally of 1.0740, and the pound fell below 1.2450 to refresh the daily low after the US GDP was announced, and U.S. stocks regained at 1.2520 at midday, close to the high since April 12 after European stocks rose below 1.2520 intraday.
The offshore yuan (CNH) fell to 7.2739 against the dollar in early Asian trading, refreshing the low since Tuesday, April 16 to 7.2831 for two consecutive days. Close to 7.27, U.S. stocks continued to expand after the opening, refreshed the daily high of 7.2537 at noon, up 202 points from the daily low, Beijing time at 4:59 on April 26, the offshore yuan against the US dollar reported 7.2553 yuan, up 178 points from the end of New York on Wednesday, ending a two-day losing streak, and rose on the second day of the week.
Bitcoin (BTC) fell below $63,000 to $62,900 before the US GDP was announced, refreshing the low since the intraday fall below $60,000 on Friday, April 19, and continued to rebound after the GDP was announced, and the US stock market traded at a price of $65,000 at the end of the day, up more than $2,000 from the daily low, up nearly 4%, and the U.S. stock market hovered at $65,000 at the close, up more than 1% in the last 24 hours, still far from the high since April 13, which rose above $67,200 on Tuesday.
Crude oil GDP then turned down and then rebounded more than 1% to hit a new high in more than a week
International crude oil futures turned down several times during the session on Thursday. When the U.S. GDP refreshed the daily high before the announcement, the U.S. WTI crude oil rose above $83.30, and Brent crude oil rose above $88.50, up about 0.6% during the day.
When U.S. stocks refreshed their daily lows in early trading, U.S. oil fell below $82.00, down 1% during the day, and cloth oil approached $87.30, down 0.8% during the day, and continued to rise after midday, and when the daily high was refreshed, U.S. oil rose above $83.80, up 1.2% on the day, and Brent oil rose above $89.20, up nearly 1.4% on the day.
Eventually, crude oil, which had retreated on Wednesday, rebounded and closed higher on the second day of the week. WTI crude oil futures for June delivery closed up $0.76, or 0.92%, at $83.57 a barrel, while Brent crude futures for June delivery closed up $0.99, or 1.12%, at $89.01 a barrel, both updating their closing highs since April 16.
U.S. gasoline and natural gas futures continue to be mixed. NYMEX May gasoline futures closed up about 0.9% at $2.7582/gal, up for three consecutive days, updating their highest since April 16, while NYMEX May natural gas futures closed down 0.85% at $1.6530/MMBtu, falling for two consecutive days and continuing to fall from Tuesday's high since April 10.
Lunxi rebounded by more than 3%, and London copper rose twice in a row to close to the high level of nearly two years, and gold once fell after GDP, and then rose by more than 1%
London base metals futures rose more on Thursday. Lunxi, which led the rally, rose more than 3% and rebounded after falling for two consecutive days to a more than one-week low, but will still fall this week due to a fall of more than 7% on Tuesday. London zinc rose more than 1.5%, and London copper both rose for two consecutive days, approaching the highs set by each last Friday since April last year and since April 2022. London lead rose for three consecutive days, approaching the highest level since November last year set on Friday. London nickel, which has fallen for two consecutive days, rose more than 1% and began to approach the high set on Monday since September last year.
London aluminum, which rebounded slightly on Wednesday, fell more than 1.5% to a more than one-week low, far from a nearly two-year high set on Monday.
Gold turned up several times during the session. When the Asian market refreshed the daily low, New York gold futures fell to $2316.4, down more than 0.9% during the day, spot gold was close to $2305, down nearly 0.5% during the day, European stocks turned up before the market, and the US GDP fell back after the announcement, and the US stock market before the market, gold futures and spot gold fell below $2330 and $2320 respectively, and the short-term fell in the day.
Gold U.S. stocks rose in early trading, gold futures rose to $2357.6, up more than 0.8% in the day, spot gold rose above $2340, up more than 1.2% in the day, all returned to the intraday level on Monday, April 22, erasing the previous two days of decline, and then gradually gave up more than half of the gains.
At the close, COMEX June gold futures, which had fallen for three days, rose 0.18% to $2,342.5 an ounce, bidding farewell to Wednesday's refreshed closing low since April 4.
At the close of U.S. stocks, spot gold was above $2,330, up more than 0.7% on the day, still far from the record closing high set by just below $2,390 on Friday, as it fell more than 2% on Monday and will still fall this week.
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