Wall St set to open lower as Meta Platforms, economic data weigh
Reuters
Published Apr 25, 2024 20:05
Updated Apr 25, 2024 23:11
By Shristi Achar A and Shashwat Chauhan
(Reuters) - U.S. stocks were poised to open sharply lower on Thursday, dragged down by growth stocks after dour quarterly results from Meta Platforms, while signs of persistent inflation dampened hopes of the Federal Reserve cutting interest rates anytime soon.
Meta plunged 16% in premarket trading after the Facebook-parent forecast higher expenses and lighter-than-expected revenue.
Social media firms such as Snap and Pinterest fell 4.5% and 5.9%, respectively.
Most other growth stocks also came under pressure, with Alphabet (NASDAQ:GOOGL), Amazon.com (NASDAQ:AMZN) and Microsoft (NASDAQ:MSFT) down between 2.5% and 3.5%.
Alphabet, Microsoft and Intel (NASDAQ:INTC) are scheduled to report their quarterly numbers on Thursday after markets close.
Adding to losses, the Commerce Department's snapshot of first-quarter gross domestic product (GDP) showed 1.6% growth, against a 2.4% increase forecast by economists polled by Reuters.
The report showed a 3.7% rise in core PCE prices advances, against expectations of a 3.4% increase, ahead of the Personal Consumption Expenditures (PCE) index, the U.S. central bank's preferred inflation gauge, on Friday.
"The economy continues to grow, but at a slower pace and you still have sticky inflation, that just means that the Fed is not likely to cut in June and a big question mark for the remainder of the year," said Peter Cardillo, chief market economist at Spartan Capital Securities.
Separately, a Labor Department report showed the number of Americans filing new claims for unemployment benefits stood at 207,000 in the week ended April 20, against a consensus forecast of 215,000.
Yield on the 10-year Treasury note rose after the data, last standing at 4.7102%.
Money markets are pricing in just about 36 basis points of rate cuts from the Fed this year, down from about 150 bps seen at the start of the year, according to LSEG data.
At 8:47 a.m. ET, Dow e-minis were down 424 points, or 1.1%, S&P 500 e-minis were down 59.25 points, or 1.16%, and Nasdaq 100 e-minis were down 271.5 points, or 1.54%.
Downbeat results from other companies also weighed on equities.
International Business Machines (NYSE:IBM) dropped 9.4% after the firm said it will buy HashiCorp in a deal valued at $6.4 billion, and as its first-quarter revenue missed estimates.
Southwest Airlines (NYSE:LUV) slid 8% after slashing its estimates for new aircraft deliveries from Boeing (NYSE:BA) in 2024 for the third time, saying it plans to undertake cost-cutting measures to ease the resultant blow.
Caterpillar (NYSE:CAT) lost 5.6% after the company said it expects sales to fall in the second quarter as demand for its construction equipment eases from last year's boom.
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On the bright side, Royal Caribbean Group gained 3.1% after the cruise operator raised its annual profit forecast for a second time.
Ford gained 1.4% as the automaker's first-quarter earnings beat Wall Street's expectations.
Written By: Reuters
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