Meta collapses
The sluggish US economy is depressing sentiment on Wall Street
April 25, 2024, 10:57 p.m
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Mark Zuckerberg actually has big plans for the Facebook Group, but investors are causing the share price to collapse. Things aren’t really going well with the major indices either. Overall, Wall Street is having a rather mixed day. However, there are a few surprises.
Cloudy corporate balance sheets and dwindling interest rate hopes have hit the US stock markets. The Dow Jones index of standard stocks closed around one percent lower at 38,085 points. The technology-heavy Nasdaq fell 0.6 percent to 15,611 points. The broad S&P 500 lost 0.5 percent to 5,048 points. From an investor perspective, there was little to be pleased about on the economic front. Gross domestic product (GDP) increased by an annualized 1.6 percent in the first quarter, while experts had expected an increase of 2.4 percent.
“The economy continues to grow, but more slowly, and inflation is still sluggish. That means the Fed is unlikely to cut interest rates in June and there is a big question mark for the rest of the year,” said Peter Cardillo, chief market economist at Spartan Capital Securities. According to LSEG data, money markets are expecting the Fed to cut interest rates by around 36 basis points this year. At the beginning of the year it was around 150 basis points. On the bond markets, the interest rate on ten-year US Treasuries rose to 4.705 percent from 4.654 percent. The dollar index was 0.2 percent weaker at 105.70 points.
Meta crashes
Poor company results also dampened the mood. Meta shares plunged nearly 11 percent after Facebook parent company forecast higher expenses and lower-than-expected revenue. Most other growth stocks also came under pressure: Alphabet, Amazon.com and Microsoft lost up to 2.4 percent. IBM shares lost more than eight percent after the IT group announced the acquisition of cloud software specialist HashiCorp for $6.4 billion.
In addition, sales in the first quarter fell short of estimates. Things didn’t look any better in the industrial sector. A sales warning pushed Caterpillar’s share price down by around seven percent. After a decline in sales at the start of the year, the construction machinery manufacturer is also expecting declining revenues in the current quarter. The delays in the deliveries of Boeing aircraft caused problems for Southwest Airlines. The airline’s shares slipped by around seven percent. Southwest expects fewer than half of Boeing’s previously promised new aircraft deliveries in 2024 and wants to take measures to reduce costs. The airline is withdrawing from four airports.
You can find everything else about today’s stock market events here.