US open: Stocks head south following Q1 GDP contraction
By Iain Gilbert
Date: Wednesday 30 Apr 2025
(Sharecast News) - Major indices were in the red early on Wednesday after an advance estimate revealed the that US economy had contracted in Q125.
As of 1515 BST, the Dow Jones Industrial Average was down 1.54% at 39,904.76, while the S&P 500 shed 1.86% to 5,457.65 and the Nasdaq Composite came out of the gate 2.35% weaker at 17,050.78.
The Dow opened 622.86 points lower on Wednesday, more than reversing gains recorded in the previous session after Commerce Secretary Howard Lutnick said the White House was close to announcing a trade deal, but fell short of naming the country the administration has been in negotiations with. Later in the day, Donald Trump said tariff negotiations with India were "coming along great".
Wednesday's primary focus was news that America's economy contracted at an annualised rate of 0.3% in the three months ended 31 March, according to a preliminary reading from the Bureau of Economic Analysis, the first decline since Q122 and a sharp reversal from the 2.4% growth rate seen in Q4. Economists had been expecting to see a 0.3% increase in Q1. The Q1 contraction, which puts the US on the brink of a technical recession, was principally driven by a 41.3% surge in imports as both businesses and consumers looked to stockpile goods in order to get ahead of Donald Trump's "Liberation Day" tariff announcements on 2 April.
The advance GDP estimate also pointed to a marked slowdown in consumer spending and a decline in government spending. Trump blamed a "Biden 'Overhang'" for the weak GDP reading and told Americans that they would have to "BE PATIENT!!!" as his policies "will take a while" to take effect.
Elsewhere on the macro front, mortgage applications fell 4.2% in the week ended 25 April, according to the Mortgage Bankers Association of America, extending the previous week's 12.7% drop, which was the sharpest in six months. Applications for a mortgage to purchase a new home were down 4%, while applications to refinance a home loan also fell 4% on the week.
On another note, US companies eased up on hiring in April as they tried to prepare themselves for impacts stemming from Donald Trump's so-called "Liberation Day" tariffs, according to ADP. Private sector payrolls rose by 62,000 for the month, the smallest gain since July 2024 and down from 147,000 in March. Consensus estimates had been for an increase of 120,000. Wage gains also headed south, rising 4.5% year-on-year, down 0.1 percentage point month-on-month.
Moving on, the Bureau of Economic Analysis' personal consumption expenditures price index rose 2.30% year-on-year in March, down from February's 2.70% increase. Excluding volatile food and energy prices, the PCE price index increased 2.6% from a year earlier. On a monthly basis, personal consumption expenditures increased by $134.5bn, or 0.7%.
Still on data, the Institute for Supply Management's Chicago purchasing managers' index fell to 44.6 in April, down from 47.6 in the prior month and slightly below analysts' expectations of 45.5. April's decrease marked a 17th consecutive monthly decline.
Finally, pending home sales decreased by 0.6% year-on-year in March, according to the National Association of Realtors, but were up 6.10% month-on-month.
In the corporate space, coffee giant Starbucks posted quarterly revenue and earnings that fell short of expectations, while shares in Booking Holdings traded lower despite delivering top and bottom-line numbers that firmly beat expectations.
Quarterly earnings from tech giants Meta Platforms and Microsoft will be released after the close of trading.
Reporting by Iain Gilbert at Sharecast.com
Dow Jones - Risers
Verizon Communications Inc. (VZ) $43.51 1.30%
Amgen Inc. (AMGN) $286.60 1.17%
Dowdupont Inc. (DWDP) $0.00 0.00%
McDonald's Corp. (MCD) $313.50 -0.32%
Cisco Systems Inc. (CSCO) $56.58 -0.39%
Johnson & Johnson (JNJ) $155.26 -0.42%
Caterpillar Inc. (CAT) $305.47 -0.63%
Coca-Cola Co. (KO) $71.89 -0.63%
Apple Inc. (AAPL) $207.91 -0.78%
Merck & Co. Inc. (MRK) $83.97 -0.87%
Dow Jones - Fallers
Intel Corp. (INTC) $19.68 -4.02%
Nike Inc. (NKE) $55.37 -3.78%
American Express Co. (AXP) $258.42 -3.22%
Goldman Sachs Group Inc. (GS) $533.82 -2.75%
Chevron Corp. (CVX) $135.48 -2.75%
Walt Disney Co. (DIS) $88.86 -2.53%
3M Co. (MMM) $135.08 -2.38%
Dow Chemical Co. (DOW) $29.92 -2.38%
JP Morgan Chase & Co. (JPM) $239.10 -2.25%
Travelers Company Inc. (TRV) $258.24 -2.20%
S&P 500 - Risers
Qorvo, Inc. (QRVO) $68.18 7.76%
Sba Communications Corp. (SBAC) $240.16 6.97%
Seagate Technology Plc (STX) $87.18 6.86%
PPG Industries Inc. (PPG) $108.33 4.36%
Mondelez International Inc. (MDLZ) $67.80 4.36%
Incyte Corp. (INCY) $60.12 2.87%
Western Digital Corp. (WDC) $41.96 2.86%
Vulcan Materials Co. (VMC) $252.25 2.81%
PACCAR Inc. (PCAR) $87.21 2.53%
Brighthouse Financial, Inc. (BHF) $55.68 2.14%
S&P 500 - Fallers
Norwegian Cruise Line Holdings Ltd (NCLH) $15.40 -11.42%
Edison International (EIX) $54.42 -7.33%
ONEOK Inc. (OKE) $81.43 -7.32%
Expedia Group Inc. (EXPE) $149.54 -7.25%
Carnival Corp. (CCL) $17.42 -6.92%
Starbucks Corp. (SBUX) $78.00 -6.78%
Freeport-McMoRan Inc (FCX) $34.73 -6.56%
Unum Group (UNM) $74.19 -6.37%
Boston Properties Inc. (BXP) $61.08 -6.20%
International Paper Co. (IP) $44.76 -6.03%
Nasdaq 100 - Risers
Seagate Technology Plc (STX) $87.18 6.10%
Mondelez International Inc. (MDLZ) $67.80 4.34%
Western Digital Corp. (WDC) $41.96 2.74%
Incyte Corp. (INCY) $60.12 2.65%
PACCAR Inc. (PCAR) $87.21 2.61%
T-Mobile Us, Inc. (TMUS) $242.46 1.95%
Mercadolibre Inc. (MELI) $2,246.10 1.71%
O'Reilly Automotive Inc. (ORLY) $1,392.41 1.62%
Amgen Inc. (AMGN) $286.99 1.30%
Vertex Pharmaceuticals Inc. (VRTX) $501.49 1.22%
Nasdaq 100 - Fallers
Expedia Group Inc. (EXPE) $149.54 -7.25%
Starbucks Corp. (SBUX) $78.00 -6.78%
Micron Technology Inc. (MU) $73.74 -4.62%
Sirius XM Holdings Inc (SIRI) $20.69 -4.30%
Intel Corp. (INTC) $19.65 -4.22%
Broadcom Inc. (AVGO) $184.81 -3.98%
Applied Materials Inc. (AMAT) $145.20 -3.71%
Nvidia Corp. (NVDA) $104.72 -3.68%
Microchip Technology Inc. (MCHP) $44.31 -3.63%
J.B. Hunt Transport Services Inc. (JBHT) $126.39 -3.48%
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