Stock Market Today: Markets Tumble Amid Slower Economic Growth and Rising Prices
Disappointing readings on GDP and inflation helped tank equities.


This week's stock market rebound came to a screeching halt thanks to a disappointing reading on economic growth and mounting price pressures.
Thursday's session got off to a rocky start as market participants reacted to sharply slower economic growth and a jump in a key measure of inflation.
The initial reading of first-quarter gross domestic product (GDP) came in at a 1.6% annualized rate, according to the Bureau of Economic Analysis. That was well below economists' estimate of 2.4%, as well as the slowest rate of growth since the second quarter of 2022.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Although slower economic growth should theoretically help the Federal Reserve in its fight against inflation, the GDP report also revealed that price pressures mounted at the fastest pace in almost a year.
The Fed's preferred inflation gauge – the core Personal Consumption Expenditures (PCE) price index, which excludes food and energy costs – surged 3.7% in Q1. That was the biggest increase in nearly 12 months. Recall that the Fed's long-term inflation target, which is informed by core PCE, is 2%.
While slower growth and rising prices prompted some pearl-clutching over the possibility of stagflation, most economists were more measured in their analyses.
"The sharp slowdown in real consumer spending growth in the first quarter should restore some faith that the Fed's restrictive monetary policy is having a dampening impact on consumer demand, since most of the weakness came from interest-rate sensitive spending," writes Scott Anderson, chief U.S. economist at BMO Capital Markets. "On the other hand, the broad price inflation resurgence we saw in this report will give the FOMC pause that their work to vanquish the inflation monster is nowhere near complete."
Suffice to say, more evidence that inflation is far from whipped once again threw the timing of the Federal Open Market Committee's (FOMC) rate-cutting plans into question. Traders now think there's just a 29% chance the FOMC will enact its first quarter-point cut to the federal funds rate in July, according to CME Group's FedWatch Tool, down from 38% a day ago.
At the closing bell, the blue-chip Dow Jones Industrial Average was off nearly 1% at 38,085, while the broader S&P 500 shed 0.5% to 5,048. The tech-heavy Nasdaq Composite declined 0.6% to 15,611.
Meta forecast craters stock
A heavy day of corporate earnings reports was overshadowed by the big bomb dropped by Meta Platforms (META) the previous evening. Although the Facebook, Instagram and WhatsApp parent easily topped analysts' top- and bottom-line estimates, META discovered Thursday that stocks are forward looking.
After all, what spooked the market was guidance. Meta said second-quarter revenue would be lower than Wall Street's average estimate. What's more, the company issued a higher-than-expected outlook for costs as it ramps up spending on artificial intelligence (AI).
Profligate spending was a major issue for META shareholders before the company slashed costs last year, a period CEO Mark Zuckerberg dubbed "the year of efficiency."
The steep slowdown in expected revenue and increased costs sparked a rout in META stock. Shares lost 10.6% Thursday, shedding $132 billion in market capitalization in the process. For context, that's essentially the entire market value of the Lowe's (LOW) home improvement chain.
META bulls contend the selloff is a chance to pick up shares on the cheap. Jefferies analyst Brent Thill maintained a Buy rating after earnings, although he did cut his price target to $540 from $585 in an April 25 report.
"The acceleration in Q1 revenue growth to 27% year-over-year (from 22%) is likely being overshadowed by the implied Q2 revenue growth deceleration to 18% year-over-year ... and increases in fiscal 2024 total expense and capex outlooks," Thill says.
META's results might have disappointed the market, but participants will get a chance to bid equities back up with a number of other Magnificent 7 stocks set to report. Microsoft (MSFT) and Amazon.com (AMZN) – both of which happen to be among analysts' top-rated Dow Jones stocks – now loom even larger on the earnings calendar.
Related content
- How AI Can Help Take the Emotion Out of Investor Decisions
- Best Dividend Stocks for Dependable Dividend Growth
- 8 Best Commodity ETFs to Buy Now
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Dan Burrows is Kiplinger's senior investing writer, having joined the publication full time in 2016.
A long-time financial journalist, Dan is a veteran of MarketWatch, CBS MoneyWatch, SmartMoney, InvestorPlace, DailyFinance and other tier 1 national publications. He has written for The Wall Street Journal, Bloomberg and Consumer Reports and his stories have appeared in the New York Daily News, the San Jose Mercury News and Investor's Business Daily, among many other outlets. As a senior writer at AOL's DailyFinance, Dan reported market news from the floor of the New York Stock Exchange.
Once upon a time – before his days as a financial reporter and assistant financial editor at legendary fashion trade paper Women's Wear Daily – Dan worked for Spy magazine, scribbled away at Time Inc. and contributed to Maxim magazine back when lad mags were a thing. He's also written for Esquire magazine's Dubious Achievements Awards.
In his current role at Kiplinger, Dan writes about markets and macroeconomics.
Dan holds a bachelor's degree from Oberlin College and a master's degree from Columbia University.
Disclosure: Dan does not trade individual stocks or securities. He is eternally long the U.S equity market, primarily through tax-advantaged accounts.
-
Test Out Your Retirement Before You Call It Quits
It's not easy to take a retirement back. Before you make the plunge, test the waters with these tips.
-
Sling TV Launches Select Plan With Lower Price Point
A lean new $19.99 bundle combines top news, sports and entertainment channels with 4K options and local feeds.
-
Bonds Pay in Good and Bad Times
Bonds can act as a financial safety net through good times and bad. But different bonds carry different returns and risks, so do your homework before investing.
-
When You Need Capital Quickly, Think 'Ready, Set, Fund': A Financial Adviser's Strategy
Investors must be able to free up cash to meet short-term needs from time to time. This strategy will help you access capital without derailing your long-term goals.
-
I'm an Estate Planner: Moving Family Assets to a Safe Haven Abroad Could Be a Huge Headache for Your Heirs
In troubled times like these, wealthy clients may seek financial refuge outside of the U.S. But that could cause more tax and estate problems than it solves.
-
S&P 500 Extends Losing Streak Ahead of Powell Speech: Stock Market Today
Stocks continued to struggle ahead of Fed Chair Powell's Friday morning speech at Jackson Hole.
-
A Timeline of Warren Buffett's Life and Berkshire Hathaway
Buffett was the face of Berkshire Hathaway for 60 years. Here's a timeline of how he built the sprawling holding company and its outperforming equity portfolio.
-
Powell Signals Rate Cuts in His Jackson Hole Speech. Here's What Wall Street is Saying
In his speech at the Jackson Hole symposium Friday, Fed Chair Jerome Powell said current conditions "may warrant" rate cuts.
-
Fall Is Tax Time? Yes! Act Now to Make Needed Adjustments
Review your withholdings, contribute to tax-saving HSA and FSA accounts, manage a bonus' impact and adjust for major life events such as weddings and job changes.
-
Board Service in Retirement: The Best Time to Join a Board Is Before You Retire
Many senior executives wait until retirement to take a seat on a corporate board. But making this career move early is a win-win for you and your current organization.