A trader works on the floor at the New York Stock Exchange (NYSE) in New York City, U.S., April 28, 2025. (REUTERS/Brendan McDermid)

- Wall Street plunged as GDP contracted and inflation rose, deepening investor fears over tariffs and Trump’s erratic trade policy.
- Consumer spending surged last month, but tech stocks and AI investments slumped amid warnings of weaker forecasts and spending delays.
- All S&P sectors dropped; volatility spiked as traders priced in full-point rate cuts and eyed Fed response to shaky data.
Share
Getting your Trinity Audio player ready...
|
(Reuters) – Wall Street’s main indexes dropped on Wednesday after data showed the economy contracted for the first time in three years in the first quarter, deepening concerns around the impact of U.S. tariffs and the global trade war.
Private payrolls growth also slowed more than expected in April, while the personal consumption expenditure index – the Federal Reserve’s preferred inflation gauge – rose slightly more than expected in March on an annual basis.
Wednesday’s reports join a series of data releases over the month that have pointed to an increasingly uncertain outlook for the U.S. economy, as the fallout from the Trump administration’s steep tariffs and erratic trade policy take effect.
“Given the amount of damage that’s been done to businesses (and) consumer confidence, we could just be getting started on seeing a continuation of these weaker numbers,” said John Luke Tyner, portfolio manager at Aptus Capital Advisors.
Consumer Spending Jumped Last Month
U.S. consumer spending jumped last month as households rushed to buy motor vehicles to avoid higher prices and shortages due to tariffs.
Traders are now pricing in a full percentage point interest rate cut by the end of the year from the Fed.
Caterpillar declined marginally, after gaining premarket following its quarterly results.
At 10:03 a.m. ET, the Dow Jones Industrial Average fell 699.90 points, or 1.73%, to 39,827.72, the S&P 500 lost 113.47 points, or 2.04%, to 5,447.36 and the Nasdaq Composite lost 449.75 points, or 2.58%, to 17,011.57.
All S&P 500 sectors were in the red, with consumer discretionary and information technology shares down 3.6% and 2.3%, respectively.
The CBOE Volatility index, seen as Wall Street’s fear gauge, was up 3.53 points at 27.69, its highest in nearly a week.
“Magnificent Seven” members Meta Platforms and Microsoft fell 2% and 3% ahead of their results, due after markets close, that investors are watching closely for clarity on the outlook for the tech sector and AI-focused investments.
Fanning concerns about a pullback in investments into AI, Super Micro Computer cut its third-quarter forecasts due to delays in customer spending, while Snapchat parent Snap said it would not provide a second-quarter financial forecast.
Their shares fell more than 16% each.
Wall Street’s Indexes Recoup
Wall Street’s indexes recouped some ground this month after a sharp slump following the April 2 “Liberation Day” tariff announcements, but are set for monthly declines.
The S&P 500 is set to snap its best winning streak since November if losses hold through close.
Wednesday also marks 100 days since Trump took office. Erratic changes in trade policies and uncertainty have roiled markets over that period, offsetting initial optimism over the administration’s business-friendly policies.
“If you were looking for a playbook on how to slow a healthy economy, (policy changes) seem like a good example,” said Scott Helfstein, head of investment strategy at Global X.
Among other stocks, Norwegian Cruise Line Holdings tumbled 10% after missing first-quarter earnings estimates.
Declining issues outnumbered advancers by a 7.61-to-1 ratio on the NYSE and by a 4.77-to-1 ratio on the Nasdaq.
The S&P 500 posted 2 new 52-week highs and 3 new lows while the Nasdaq Composite recorded 14 new highs and 57 new lows.
—
(Reporting by Lisa Mattackal and Purvi Agarwal in Bengaluru; Editing by Devika Syamnath)
RELATED TOPICS:
Wired Wednesday — FUSD Facing Four Lawsuits Including Nepotism and Incompetence
36 minutes ago
FBI and Chilean Police Take Down International Gang of Thieves
52 minutes ago
Weak GDP Report Tied to Tariffs Has Trump Trying to Blame Biden on the State of the Economy
1 hour ago
Falling Oil Prices Poised for Biggest Monthly Decline Since 2021
2 hours ago
California’s Multifamily Housing Production Costs Soar Above Other States
2 hours ago
Walmart Reinstates Minimum Basket Fee for SNAP Orders
3 hours ago
Valley Crime Stoppers’ Most Wanted Person of the Day Sought for Lewd Acts with a Child
3 hours ago
China to Lift Sanctions on Members of European Parliament
3 hours ago
Fresno Shooting Sends 12 Shots Into Neighborhood, Two Injured
34 seconds ago
Categories

Fresno County to Honor Fallen Officers at Annual Memorial Ceremony

Wired Wednesday — FUSD Facing Four Lawsuits Including Nepotism and Incompetence

FBI and Chilean Police Take Down International Gang of Thieves

Weak GDP Report Tied to Tariffs Has Trump Trying to Blame Biden on the State of the Economy

Wired Wednesday — FUSD Facing Four Lawsuits Including Nepotism and Incompetence
