Proactive Investors - 9.51am: Wall Street sees red
Wall Street sunk into the red as trading got underway on Thursday after gross domestic product data (GDP) showed slowing growth over the first three months of the year.
GDP climbed by 1.6% over the first quarter, against 3.4% during the final three months of last year and below market expectations for a 2.4% increase.
The Nasdaq dipped 329 points to 15,383 on the news, while the Dow Jones lost 531 points to go to 37,929 and the S&P 500 slipped 71 points to 4,999.
Validus Risk Management’s Ryan Brandham noted the GDP figure was “particularly surprising given the perceived strength of the economy”.
He added: “Despite this, price components came in higher than expected.
“This combination of slower growth alongside higher prices is worrying. If higher prices persist, the Fed will find it hard to cut rates to support growth.”
Almost $200bn wiped of Meta’s value
Adding pressure on Thursday was a near 14% drop in Meta Platforms Inc (NASDAQ:META, ETR:FB2A, SWX:FB)’s share price after a first-quarter trading update on Wednesday evening disappointed.
This equated to almost US$200 billion lost from Meta’s market cap, as investors appeared to flee over higher-than-expected spending on artificial intelligence and full-year guidance.
7.06am: Wall Street facing tough start
Wall Street looked to be dragged lower by a slump in Meta Platforms Inc (NASDAQ:META, ETR:FB2A, SWX:FB) shares overnight after the technology giant disappointed with guidance in Wednesday’s first quarter update.
Shares in the Facebook (NASDAQ:META) and Instagram owner were down 14% in pre-market trading after Meta said spending on artificial intelligence would be higher than expected for the year, while revenue would sit between $36.5-$39 billion, against consensus of $38.5 billion.
Futures had The Dow Jones falling 222 points on Thursday’s open following the news, while the Nasdaq and S&P 500 looked to fall 167 and 31 points respectively.
“This highlights how pre-release performance and the company’s outlook are often more important than the numbers themselves,” Scope Markets analyst Joshua Mahony said on Meta’s earnings.
“All eyes turn towards Microsoft (NASDAQ:MSFT) and Alphabet (NASDAQ:GOOGL) whose numbers are released after the close today,” he added.
Also on the cards for Thursday was US gross domestic product data, with markets expecting growth of 2.5% over the first quarter.