Wall Street plunged into the red on Thursday morning, as economic indicators released in the morning dashed hopes of a forthcoming Fed rate cut.

Just over an hour after opening, the Dow Jones dropped 1.7% to 37,817.3 points, heading for its biggest decline of the year.817.3 points, heading for its steepest decline of the year, while the Nasdaq dropped 1.5% to 15,462.4 points.

The Commerce Department announced early this morning that US GDP growth had slowed to 1.6% in the first quarter, compared with +3.4% in the fourth quarter of 2023.

While this figure is below economists' forecasts, it is far from likely to prompt a change of direction on the part of the Federal Reserve, according to professionals.

Admittedly, the pace of growth is no longer as dynamic as that recorded in the second half of 2023, but the US economy continues to perform well in view of a monetary policy that remains restrictive", emphasize Commerzbank analysts.

"This is unlikely to precipitate a cut in Fed interest rates, especially given that the 'PCE' deflator has exceeded expectations", adds the German bank.

Core PCE inflation - the Fed's preferred measure of inflation - came in at 3.7% for the first three months of the year, compared with 3.4% expected by analysts.

Following these statistics, the yield on the US 10-year jumped eight basis points above 4.73%, setting a new high since the end of November, testifying to investors' anticipation of high rates for a longer period than expected.

These concerns were compounded by a poorly received quarterly report from Meta, the parent company of Facebook and Instagram, which put a damper on the recent surge of optimism surrounding the technology sector.

The Californian group published results in line with expectations on Wednesday evening, but unveiled a sales forecast for 2024 that was deemed cautious, causing its share price to plunge by 10% in early trading.

Meta is dragging down other technology heavyweights, including Alphabet (-3%) and Microsoft (-4%), which will publish their accounts later this evening.

On the Dow, Merck's results, boosted by sales of the anti-cancer drug Keytruda, were greeted by a 1.7% rise, but Caterpillar's more mixed performance was punished by a 7.5% decline.

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