Nasdaq 100, Dow Jones, S&P 500 News: Tech Giants Struggle as Market Uncertainty Intensifies

U.S. Economic Slowdown and Inflation Concerns Drive Market Decline

Stocks faced significant losses on Thursday following U.S. economic data indicating a slowdown in growth and persistent inflation concerns. This unsettling economic landscape has set a cautious tone ahead of earnings reports from tech giants like Microsoft and Alphabet.

At 16:00 GMT, the Dow Jones Industrial Average is trading 38131.60, down 329.32 or -0.86%. The S&P 500 Index is at 5050.35, down 21.28 or 0.42% and the Nasdaq 100 is trading 15607.67, down 105.08 or -0.67%.

Economic Indicators Point to Stagflation Concerns

The U.S. Bureau of Economic Analysis reported a lower-than-expected GDP growth of 1.6% for the first quarter, against forecasts of 2.4%. Concurrently, consumer prices rose at a 3.4% rate, significantly higher than the previous 1.8%, suggesting an ongoing inflation issue. These figures hint at a possible stagflation scenario, complicating the Federal Reserve’s policy decisions. Market reactions were swift, with Fed funds futures indicating only one potential rate cut this year, signaling tightening monetary policy expectations.

Impact on Stock Markets

The Dow Jones Industrial Average fell into negative territory for the week, illustrating the impact of these economic reports. The S&P 500 and Nasdaq, although also experiencing declines, were still on track to end the week with gains of 0.8% and 1%, respectively. Tech stocks, however, felt a notable pressure; Meta Platforms plunged by 12% following disappointing revenue guidance, marking its largest single-day drop since October 2022. This downturn reflects broader market uncertainties, especially in sectors sensitive to economic shifts.

Midday Movers

Several stocks showed notable movement in midday trading. Victoria’s Secret fell by 3.5% following a sell rating from Goldman Sachs, citing tough macro conditions. Conversely, Merck & Co. saw an increase of 2% after reporting stronger-than-expected earnings and revenue. Among tech, significant drops were observed in Microsoft and Alphabet, each down approximately 3%, influenced by broader sector movements and individual company challenges. Chipotle Mexican Grill and Monster Beverage also featured prominently, with Chipotle shares rising 5% after exceeding first-quarter expectations, while Monster Beverage faced a downgrade impacting its stock negatively.

Market Forecast

Looking ahead, the market is poised for continued volatility. The blend of slow growth, rising inflation, and cautious monetary policy hints at a challenging environment for equities. Investors might see more defensive trading patterns as they navigate through economic uncertainties and await further clarity from upcoming earnings reports and Federal Reserve actions.

Technical Analysis

The short-term and intermediate-term trends are down but the longer-term trend is still up.

The new minor top is 5128.75. A trade through this level will change the minor trend to up and shift momentum to the downside.

The new minor range is 4963.50 to 5128.75. Its 50% level is 5046.25. Trader reaction to this pivot will determine the direction of the benchmark index into the close.