A volatile day on Wall Street ended with modest gains for the broader market, even as new data confirmed that the US economy contracted in the first quarter. The Dow Jones Industrial Average rose 141 points, or 0.35%, to close at 40,669. The S&P 500 added 0.15%, ending at 5,569, while the Nasdaq Composite slipped slightly, down 0.09% to 17,446.
It was a choppy session. At one point, the Dow fell more than 780 points and the S&P dropped over 2%, as fears of a recession gripped investors following the release of the latest GDP figures.
GDP declines
The Commerce Department reported that gross domestic product fell by 0.3% in the first quarter—its first contraction since 2022. That marked a sharp turnaround from the 2.4% growth recorded in the final months of last year.
Much of the decline was linked to a massive 41% surge in imports, as companies rushed to bring in goods ahead of President Trump’s newly announced tariffs. Consumer spending also slowed, and government outlays dropped sharply, in part due to cuts from Elon Musk’s Department of Government Efficiency.
Still, not all the data was negative. March consumer spending rose by 0.7%, exceeding expectations, offering a glimmer of resilience in an otherwise weak quarter.
Big tech earnings surprise to the upside
Investors also found reason for optimism in the latest results from two of the market’s most closely watched tech giants. Shares of Meta jumped more than 5% in after-hours trading after the company reported 16% revenue growth and a 35% jump in net income, powered by strong ad sales and expanding user numbers. CEO Mark Zuckerberg said Meta had made “a strong start to an important year,” with nearly 1 billion users now engaging with its in-house AI assistant.
Microsoft also impressed, with its stock up more than 6% following a beat on both earnings and revenue. The company posted a 13% rise in revenue to US$70.1bn, driven by a 33% surge in Azure cloud revenue, nearly half of which was linked to AI services. Capital spending soared 53% year-on-year as Microsoft continued to scale up its AI data centres.
April ends on rebound
Despite the shaky macro picture, markets staged a comeback late in the day and managed to claw back some of April’s earlier losses. The S&P 500 still ended the month down 0.8%, while the Dow dropped 3.2%. That marked the third consecutive losing month for both. The Nasdaq, however, managed a 0.9% gain for April, helped by strength in large-cap tech.
Commodities and the dollar
WTI crude is trading 3.66% lower at US$48.21 a barrel.
Spot gold is trading 0.44% lower at US$3,319.10 an ounce.
One Australian dollar is buying 64.03 US cents.
Futures
The SPI futures are pointing to a 28 point fall at the open.