S&P500 and Nasdaq Index: Stock Market Drops as GDP Miss Sparks Bearish Sentiment

Stocks Sink at Open on Growth Fears; Tech and Consumer Names Lead Declines

U.S. stocks opened sharply lower Wednesday after a disappointing GDP report and weak private payroll numbers rattled investor sentiment. The Dow Jones Industrial Average fell more than 300 points at the open, while the S&P 500 and Nasdaq slid 1.2% and 1.6%, respectively. The losses come as traders weigh the implications of slowing growth on Fed policy and corporate earnings, particularly in rate-sensitive sectors.

Which economic data are hitting markets this morning?

First-quarter U.S. GDP contracted by 0.3%, a reversal from the previous quarter’s 2.4% gain. The decline was driven in part by a 41% surge in imports, as businesses accelerated purchases ahead of potential trade actions. The data reinforced fears that aggressive trade policy moves have already dented business activity before any final deals are reached. Meanwhile, ADP reported that private payroll growth slowed sharply to just 62,000 in April—nearly half of economists’ 120,000 forecast—adding to worries of a labor market cool-down.

What stocks are dragging major indexes lower?

Tech and consumer stocks led losses. Nvidia opened down over 3% following a 19% plunge in Super Micro Computer, which issued weaker-than-expected preliminary results. Snap tumbled 15% after declining to offer forward guidance, citing uncertainty in advertising demand, though it beat on revenue. Starbucks fell more than 9% after missing both earnings and revenue expectations for the quarter, with analysts citing weaker-than-expected traffic and higher operating costs.

Small-cap stocks also retreated. The iShares Russell 2000 ETF (IWM) dropped 1.7% at the open, snapping a six-day win streak as the broader risk-off tone pressured high-beta names. First Solar fell 13% after missing earnings and lowering guidance, compounding pressure in the renewable energy space.

Were there any gainers in early trade?

Despite the broad selloff, a few stocks bucked the trend. Seagate Technology jumped 6% after reporting stronger-than-expected earnings and raising its outlook. GE Healthcare rose over 4% on upbeat results and a newly announced $1 billion share buyback.

Humana surged 5% after its quarterly earnings handily beat Wall Street forecasts. Oddity Tech climbed 16% after raising its full-year revenue forecast, with management citing pricing power and cost offsets amid ongoing tariff concerns.

What’s the outlook from here?

Investors are growing increasingly concerned that the Fed may be cornered—facing sticky inflation yet unable to justify rate cuts in a slowing economy.

With April’s market rebound now under threat, attention turns to Friday’s core PCE inflation print. A hotter-than-expected reading could reinforce the Fed’s higher-for-longer stance, adding further pressure on equities, especially in tech and small caps.

Until there’s clear evidence of easing inflation or stronger growth, traders may remain defensive.

More Information in our Economic Calendar.