Correspondents reported that the Dow Jones Index fell today (April 25, 2024) by more than 500 points after the US economy expanded less than expected in the first quarter of 2024 amid high inflation rates, and the Jones Industrial Average recorded 37,955.09 points, a decrease of 505.83 points, or 1.32%.
In addition, the market was also pressured by the rebound in US government bond yields. The yield on the 10-year US Treasury note rose above 4.7% today, reaching its highest level in more than five months.
The US Commerce Department released its first GDP estimates for the first quarter of 2024 today, saying the US economy grew 1.6% in the quarter. Lower than analysts' expectations of 2.4%.
The US economy's expansion in the first quarter of 2024 was affected by a slowdown in consumer spending. In 2023, the US economy expanded by 2.2%, 2.1%, 4.9%, and 3.4% in the first quarter of 2020, the second quarter of 2024, and the third and fourth quarters, respectively.
In addition, the Ministry of Commerce revealed that the Consumer Price Index (CPI) rebounded to 3.4% in the first quarter of 2024, higher than the 1.8% level in the fourth quarter of 2023, causing investors to worry about rising inflation. This will be a factor pushing the US Federal Reserve to keep interest rates high for longer than expected.
Meanwhile, market trading was affected by a decline in shares of Meta Platforms Inc, the parent company of Facebook and Instagram.
Meta's stock price fell more than 15% after investors were disappointed with sales expectations for the second quarter of 2024.
The release of Meta's earnings report raised investors' concerns ahead of the release of other companies' earnings results. In the technology sector, Microsoft Corp and Alphabet Inc are scheduled to announce… announced their profits after the market closed today.
Investors will be watching the Personal Consumption Expenditures (PCE) price index tomorrow.
Meanwhile, analysts expect the headline personal consumption expenditures index, which includes food and energy categories, to rise 2.6% in March year-over-year from 2.5% in February.
On a monthly basis, the overall PCE index is expected to rise by 0.3% in March from 0.3% in February.
As for the Core Personal Consumption Expenditure (Core PCE) index, which does not include the food and energy categories. It is expected to rise by 2.6% in March year-on-year from 2.8% in February.
On a monthly basis, the core personal consumption expenditures index is expected to rise 0.3% in March from 0.3% in February.
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