4:11pm: Blue chips rally on trade hopes
Wall Street wrapped up a bumpy April with a split decision on Wednesday, as investors weighed a weaker-than-expected GDP report and signs of renewed trade talks between the US and China.
The Dow climbed 142 points, or 0.4%, to finish at 40,669, marking its longest winning streak of the year. Investors continued to gravitate toward blue-chip stocks, despite a rocky start to the session. The S&P 500 inched up 8 points, or 0.2%, to 5,569, while the Nasdaq slipped 15 points, or 0.1%, to close at 17,446.
The Russell 2000, which tracks small-cap stocks, lagged behind, dropping 9 points, or 0.5%, to 1,967.
The GDP miss, driven by a jump in imports and business disruptions tied to President Trump’s trade policy, initially spooked investors. But sentiment shifted mid-afternoon after news broke that Washington had reached out to Beijing to restart tariff negotiations, rekindling hopes that trade tensions might ease.
That shift in tone helped lift the Dow and S&P back into the green by the close, although tech stocks and small-caps couldn’t quite shake off the day’s earlier losses.
For the month, the Dow fell more than 3%, giving up ground despite its recent run, while the S&P 500 and Nasdaq posted smaller losses, having staged a partial comeback in the final stretch of April.
3:46pm: Sell in May?
The six-month period from May to October has historically underperformed relative to the November-April stretch, which has seen stronger market gains.
Since 1950, the S&P 500 has averaged just a 1.8% return from May through October, with positive returns occurring only 65% of the time, according to Adam Turnquist, LPL's chief technical strategist.
"Sell in May and Go Away" has its origins in 18th-century London and its persistence due to both seasonal trends and investor psychology, Turnquist noted.
"Besides being a catchy saying," Turnquist said, "the period from May to October has historically been the worst six-month return window for the S&P 500 since 1950." He suggested that the consistent seasonal pattern, combined with the phrase’s popularity, may have helped turn it into a "self-fulfilling prophecy."
3:25pm: Stocks on the move
Snap Inc: Shares fell over 15% after the company withheld second-quarter guidance, despite beating Q1 revenue estimates with 14% growth to $1.36 billion.
Super Micro Computer Inc: Shares plunged nearly 16% after fiscal Q3 revenue guidance was cut by about $1 billion, falling short of expectations.
Charbone Hydrogen: Annual revenue rose 15% in 2024 as the company advances toward launching green hydrogen production in 2025.
OKYO Pharma: The company is accelerating development of urcosimod for corneal pain by ending its Phase 2 trial early after enrolling 17 patients.
GSK PLC: Shares rose 4% after beating Q1 earnings expectations and reaffirming full-year guidance, aided by strong margins and operating leverage.
2:36pm: Inflation cools in March
Headline inflation edged down by 0.04% in March, bringing the annual rate to 2.3%, according to the latest personal income and spending data.
The Federal Reserve's preferred inflation gauge decelerated to 2.29% year-over-year, while core inflation eased to 2.64%.
"Core services inflation ex housing, or 'supercore,' decelerated to 2.86%, the slowest gain since early 2021," noted Jeffrey Roach, Chief Economist at LPL Financial.
Real consumer spending rose 0.7% in March as households pulled forward purchases in anticipation of tariffs. Meanwhile, real disposable income increased 0.5% on the month and 1.7% from a year earlier.
Despite the softer inflation data, Roach cautioned that markets may remain unsettled. "The positive inflation release will not likely appease markets, given the continued uncertainty over trade," he said. Still, he added that more benign inflation reports would “help the Fed build its case for cutting rates in June.”
1:35pm: Wednesday's headlines
The US economy shrank more than expected in the first quarter of 2025, with gross domestic product contracting by 0.3%.
Stellantis NV (NYSE:STLA, EPA:STLA) said on Wednesday it was withdrawing its 2025 outlook due to uncertainty over new US trade tariffs introduced by Donald Trump.
GSK PLC (LSE:GSK, NYSE:GSK) reported earnings ahead of expectations and kept full-year guidance intact, even though sales of vaccines softened.
Snap Inc (NYSE:SNAP) has withheld second quarter guidance, sending its shares more than 15% lower despite handing down a solid first quarter report.
12:16pm: Growth concerns mount
Stocks are taking a hit around midday as investors sift through a batch of economic data and brace for the end of a rocky April.
The Dow is down 0.5%, the S&P 500 has slipped 0.9%, and the Nasdaq is leading the losses, off by 1.3%.
It’s been a choppy month for markets overall. Despite a short-lived rally last week, both the S&P 500 and Nasdaq are still on pace to close April in the red.
The Dow, which had been on a six-day winning streak, has now broken that run and is still down more than 3.5% for the month.
11:20am: Stagflation fears jolt markets
US economic data delivered a sharp jolt to investors, triggering a market selloff.
Chris Beauchamp at IG pointed to the combination of negative GDP growth, slowing job gains, and rising wages as signs of stagflation, saying, “Markets had been rubbing along relatively happily until today’s US data, which seemed to give form to investors’ worst nightmares.”
Despite the downturn being driven largely by imports, he said the market response was expected given the recent rally. Looking ahead, Beauchamp said tech earnings may be the key to ending April on a positive note, and that while April’s rebound was rare, similar patterns have previously marked market bottoms—with the exception of 2008.
10:40am: Q1 GDP dips on trade drag
US economic growth contracted at an annualized rate of 0.3% in the first quarter, largely due to a surge in imports of medical goods and technology products, according to Jeffery Roach, chief economist at LPL Financial.
The spike in imports subtracted nearly five percentage points from GDP, highlighting the outsized impact of trade on headline growth.
Despite the drag from net trade, Roach noted that consumer spending—particularly on health care services—rose 2.4%, underscoring continued household strength. Real final sales to domestic purchasers climbed 2.3%, suggesting the economy remains on steady footing outside of trade-related volatility.
Businesses also front-loaded inventories amid uncertainty over global trade policy, contributing to unusual distortions in the data. “We are in uncharted waters,” Roach said, pointing to forthcoming details from the Bureau of Economic Analysis.
“A successful resolution to global trade policy would likely remove most of the volatility and uncertainty currently experienced by businesses and consumers,” Roach said, adding that strong consumer demand makes recession speculation premature.
Roach added Friday’s payroll report will be key to determining the growth outlook.
9.50am: Wall Street goes into reverse, led by the Nasdaq
US stocks have not taken the GDP data well, opening sharply in the red.
The Dow Jones has started almost 600 points to the bad, down 1.5%, with the S&P 500 falling 1.8% and the Nasdaq Composite tumbling 2.4%.
Almost all 20 of the largest stocks on the Nasdaq are lower, most of them down 2% or 3%, with Nvidia down 4.2% and Tesla almost 5% lower.
Eli Lilly, Visa and Mastercard are the only ones in green.
On the S&P 500, risers are led by Seagate Technology and Western Digital, both rising 7% as both sets of earnings impressed.
8.45am: US economy shrinks
US economic growth was weaker than expected in the past quarter, with growth shrinking more than expected.
Gross domestic product growth contracted by 0.3%, data from the US Bureau of Economic Analysis showed, versus an average 0.2% decline predicted by economists.
This first estimate of Q1 GDP is the first time the US economy has shrunk year on year since 2022.
The biggest drag on growth was trade and lower government spending (think DOGE), the BEA, while a surge in imports weighed on growth to the tune of 4.8% – the most on record.
Separately, the ADP jobs report showed private payrolls increased 62,000 in April, compared with estimates for an increase of 115,000.
8.05am: S&P set to end winning run
Wall Street stocks are predicted to head back lower on Wednesday as slivers of optimism come face to face with hard numbers in corporate earnings.
While Dow Jones futures were just above flat, those for the S&P 500 were down 0.3% and for the Nasdaq 100 were 0.6% in the red.
This would reverse much of the gains for the S&P yesterday and all of the Nasdaq's rise as both climbed over 0.5%, while the Dow closed 0.75% higher.
That pushed the Dow and S&P to six-session winning streaks, marking the longest such run since July for the Dow and November for the S&P.
US stocks were buoyed by comments from Commerce Secretary Howard Lutnick that a trade deal was close, although notably declined to name the country involved.
"But the tone shifted slightly after yesterday’s close," says market analyst David Morrison at Trade Nation, noting that stock index futures slipped on some "disappointing" elements to earnings from several companies, including Visa, Super Micro Computer, Starbucks and Snap.
Earnings on Wednesday morning include Caterpillar, which has warned that tariffs could lead to up to $350 million in short-term costs, as it posted lower profits than expected for Q1. The shares are up 3.8% premarket, though.
There’s also some important economic data, with the release of core PCE numbers, the Federal Reserve’s preferred inflation measure, along with the first look at first quarter GDP and ADP payrolls, the precursor to Friday’s non-farm payrolls report.
Attention later turns to big tech results after this evening’s close, with Microsoft and Meta Platforms set to report.