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By Johan M. Cherian and Lisa Pauline Mattkal
(Reuters) – U.S. stock indexes fell on Thursday, with a decline in Salesforce (NYSE:) weighing on the Dow Jones, while data showed that the economy grew more slowly than expected in the first quarter, boosting bets on interest rate cuts from the Federal Reserve. (US Central Bank). this year.
Salesforce had the biggest weight on the Dow Jones Index, falling 20% after it forecast second-quarter earnings and revenue below Street estimates due to weak customer spending on cloud and enterprise business products.
The Commerce Department reported that US GDP growth in the first quarter fell to 1.3%, versus a 1.6% expansion previously estimated, primarily due to downward revisions to consumer spending.
Ahead of Friday’s personal consumption expenditures report for April — the Fed’s preferred measure of inflation — first-quarter growth in the core personal consumption expenditures price index was revised to 3.6% from 3.7%. Weekly unemployment claims also rose more than expected.
US Treasury yields fell after the report, while chances of a rate cut of at least 25 basis points in September rose to nearly 52%, from 48.7% before the data, according to CME Group’s (NASDAQ:) FedWatch tool.
“Less economic growth is not necessarily a negative because we are still in a growth pattern, and the good news is that inflation as measured by personal consumption expenditures has been revised downward…this will help ease pressures in the bond market and could cause… Spartan Capital Securities: “Stocks will stabilize.”
Monetary policy uncertainty, coupled with heavy new issuance of Treasury bonds, has pushed bond yields higher and put pressure on stocks.
Traders now await comments from New York Fed President John Williams and Dallas Fed President Lori Logan later in the day.
The benchmark index fell to its lowest level in two weeks, while the Dow Jones blue-chip index fell to its lowest level in one month.
However, small stocks regained some ground, with the index rising 0.7% after falling 1.5% in the previous session.
At 9:56 a.m. EST, the S&P 500 was down 356.36 points, or 0.93%, at 38,085.18, the S&P 500 was down 13.80 points, or 0.26%, at 5,253.15, and the S&P 500 was down 40.29 points, or 0.24%. , to 16880.29.
Tesla (NASDAQ:) stock rose 2.7% after Reuters reported that the company is preparing to register a “full self-driving” program in China.
Retailer American Eagle Outfitters (NYSE:) fell 6.5%, reporting downbeat quarterly revenue as flat inflation hurt demand for apparel and accessories, which are often sold at full price.
Department store chain Kohl’s (NYSE:) fell 25.2% after cutting its annual sales and profit forecasts.
Best buy (NYSE:) and HP (NYSE:) were among the biggest gainers in the S&P 500. Best Buy stock jumped 11.7% after beating quarterly earnings expectations and anticipating higher laptop sales, while HP stock rose 12.4% after… It reported better-than-expected revenues in the second quarter.
Advancing issues outnumbered decliners by 2.83 to 1 on the New York Stock Exchange and by 1.82 to 1 on the Nasdaq.
The S&P recorded seven new 52-week highs and eight new lows, while the Nasdaq recorded 27 new highs and 36 new lows.
