Dow drops more than 600 points on inflation and growth concerns, heads for biggest drop of the year: Live updates

Stocks fell sharply Thursday after the latest U.S. economic data showed a sharp slowdown in growth and pointed to persistent inflation.

The Dow Jones Industrial Average slid 631 points, or 1.7%, weighed down by sharp declines in Caterpillar and IBM. The S&P 500 dropped 1.2%, and the Nasdaq Composite lost 1.4%.

U.S. gross domestic product expanded 1.6% in the first quarter, the Bureau of Economic Analysis said. Economists polled by Dow Jones forecast GDP growth would come in at 2.4%.

Along with the downbeat growth rate for the quarter, the report showed consumer prices increased at a 3.4% pace, well above the previous quarter's 1.8% advance. This raised concern over persistent inflation and put into question whether the Federal Reserve will be able to cut rates anytime soon.

"In the short term, the numbers don't appear to be a green light for either bulls or bears … the uncertainty is unlikely to ease pressures in a market experiencing its deepest pullback since last year," said Chris Larkin, managing director of trading and investing at E*Trade from Morgan Stanley.

Following the GDP print, traders moved down expectations for an easing of Federal Reserve monetary policy. Traders now forecast just one interest rate cut this year, according to the CME FedWatch Tool.

Tech tumble

The lackluster GDP added further pressure to an already-tense market contending with concerns over a pullback in growth among technology earnings.

Meta plunged 15% in premarket trading after the social media giant issued light revenue guidance for the second quarter. That would be the stock's biggest one-day decline since October 2022. International Business Machines also fell 8% after missing consensus estimates for first-quarter revenue.

"For all of the attention given to generative AI in the past nine months, the failure of Meta to attain its revenue growth projections in Q1 is raising questions about whether the monetization of this technology is as easy as what traders were led to believe by management," said Thierry Wizman, global FX and rates strategist at Macquarie.

Meta's report raises concern ahead of other big tech releases. Microsoft and Alphabet are slated to post earnings after the close Thursday.

• Bristol Myers Squibb reported first-quarter revenue that topped expectations as its blockbuster blood thinner Eliquis and several new drugs posted sales growth.
• The pharmaceutical giant posted a quarterly loss, however, due to one-time charges associated with its recently closed deals. 
• The company also said it is executing a "strategic productivity initiative" that will drive roughly $1.5 billion in cost savings by the end of 2025.

Meta shares on pace for worst day since October 2022

Meta Platforms shares plummeted 11.34% on Thursday. The losses put the stock on pace for its worst day since October 27, 2022, when Meta declined 24.56%.

Shares fell after Meta issued weak revenue guidance that overshadowed its better-than-expected earnings in the first quarter. The sell-off intensified following CEO Mark Zuckerberg's comments on the company's long-term investments in artificial intelligence and the metaverse.

— Hakyung Kim

New York Stock Exchange decliners lead advancers 10-1

About 10 stocks traded lower at the New York Stock Exchange on Thursday for every one advancer, as the latest GDP report and new tech earnings dampened investor sentiment. Overall, 2,386 NYSE-listed stocks fell, while 210 advanced.

— Fred Imbert

The U.S. GDP report was the 'worst of both worlds,' investor says

A disappointing U.S. GDP print could spell trouble ahead for the equity market if inflation continues to prove sticky, one investor said.

"This report was the worst of both worlds: economic growth is slowing and inflationary pressures are persisting," wrote Chris Zaccarelli, investment chief at Independent Advisor Alliance.

"The Fed wants to see inflation start coming down in a persistent manner, but the market wants to see economic growth and corporate profits increasing, so if neither are headed in the right direction then that's going to be bad news for markets," he continued.

The data also raises the stakes for the personal consumption expenditures report that is set to release Friday. Investors are hoping the PCE report, which is the Fed's preferred measure of inflation, will show an improvement in pricing pressures after the March consumer inflation report came in hotter than expected.

— Sarah Min

Stocks fall after GDP data shows slowing economic growth

Stocks opened lower on Thursday, with equities selling off after fresh gross domestic product data signaled signs of slowing economic growth.

The Dow Jones Industrial Average pulled back 500 points, or 1.3%. The S&P 500 pulled back 1.4%, while the Nasdaq Composite lost 2.3%.

— Brian Evans

10-year Treasury yield jumps to highest level since November

The 10-year Treasury yield broke above 4.7% following the GDP report, hitting its highest level since November.

While slowing economic growth could be a factor that pushes the Federal Reserve toward rate cuts, the rising prices shown in the GDP report could cause the central bank to hold rates steady until inflation recedes.

— Jesse Pound

Gross domestic product slowed in the first quarter

U.S. gross domestic product slowed in the first quarter, the Bureau of Economic Analysis said Thursday, which weigh on stock futures before the opening bell.

GDP expanded 1.6% in the first quarter, while economists polled by Dow Jones forecast growth of 2.4%.

— Brian Evans

Stocks making the biggest moves premarket

Check out the companies making headlines before the bell:

Meta Platforms — The Facebook parent company plunged more than 14% after issuing lighter-than-expected second-quarter revenue guidance. However, first-quarter earnings and revenue both came above analysts' estimates. 

Honeywell — The industrial stock rose 2.2% in premarket trading after the company posted earnings per share of $2.25, beating LSEG analysts' estimates of $2.17. Revenue for the quarter came in at $9.11 billion, compared to the $9.03 billion analysts were expecting.

Merck — The pharmaceutical giant added 2.1% on stronger-than-expected earnings for the first quarter. Merck earned an adjusted $2.07 per share on $15.78 billion in revenue. Analysts surveyed by LSEG forecast $1.88 in earnings per share and $15.2 billion in revenue. 

The full list can be found here.

— Hakyung Kim

Caterpillar stock slides after sales decline

Shares of Caterpillar fell more than 3% in early trading after the construction equipment company reported softer-than-expected sales for the first quarter.

The company generated $5.60 in adjusted earnings per share on $15.8 billion of revenue. Analysts surveyed by LSEG were looking for $5.14 per share on $16.04 billion of revenue.

Sales were down year over year, including a decline in the construction industries segment, which is Caterpillar's largest.

"The decrease in sales volume was primarily driven by lower sales of equipment to end users; there was not a significant impact from changes in dealer inventories," Caterpillar said in a press release.

— Jesse Pound

Investors react to latest airline earnings

Airlines Southwest and American diverged in premarket trading as investors reacted to their first-quarter earnings reports.

Southwest dropped more than 7% after missing Wall Street expectations on both lines. It saw 36 cents in adjusted losses per share on $6.33 billion in revenue, while analysts surveyed by LSEG forecast a loss of just 34 cents and revenue at $6.42 billion.

Southwest warned that delays from Boeing could hurt its growth into 2025.

On the other hand, American added more than 4%. Despite also coming in below analysts' forecasts on both lines, investors appeared focused on stronger-than-anticipated guidance for the current quarter.

American posted an adjusted loss of 34 cents on revenue of $12.57 billion for the first quarter. That is under the consensus estimates from analysts surveyed by LSEG of a 29 cent loss and $12.6 billion in revenue.

— Alex Harring, Leslie Josephs

Honeywell rises following strong earnings

Honeywell rose in premarket trading after reporting its financial results for the latest quarter.

The industrial firm posted earnings per share of $2.25, beating analysts' estimates of $2.17, according to LSEG. Revenue for the quarter came in at $9.11 billion, compared to the $9.03 billion analysts were expecting.

Shares were last higher by 1.8%.

— Tanaya Macheel

Merck advances on better-than-expected earnings

Merck shares climbed nearly 2% before the bell on Thursday as first-quarter earnings came in ahead of expectations.

The pharmaceutical giant earned an adjusted $2.07 per share on $15.78 billion in revenue. Analysts surveyed by LSEG anticipated just $1.88 in earnings per share and $15.2 billion in revenue.

Merck was aided in the period by strong sales of its vaccination products and Keytruda cancer drug. Shares of the stock, which is part of the Dow, have jumped more than 16% in 2024.

— Alex Harring, Annika Kim Constantino

Chipotle stock adds more than 3% on earnings beat

Chipotle Mexican Grill shares jumped 3.2% during Thursday premarket trading on the back of a better-than-expected quarterly print.

The burrito chain on Wednesday reported first-quarter earnings and revenue that surpassed analysts' expectations, fueled by higher traffic to its restaurants. Earnings per share came out at $13.37, excluding items, while analysts polled by LSEG had called for $11.68 per share. Chipotle posted $2.7 billion in revenue, exceeding the consensus estimate of $2.68 billion.

Chipotle saw traffic growth across income groups during the quarter, CEO Brian Niccol said. Customers have continued to flock to the restaurant chain even after it raised its prices in October, citing inflation.

For more on Chipotle's earnings, read here.

— Pia Singh

European stocks open lower

European stocks opened slightly higher Wednesday, with the benchmark Stoxx 600 index down 0.2% by 8:15 a.m. London time.

The U.K.'s FTSE 100 climbed 0.5% after it snapped a five-day winning streak on Thursday, while France's CAC 40 was 0.2% lower, and Germany's DAX was down 0.5%.

— Karen Gilchrist

Nikkei 225 falls 2%, leads declines among Asia stocks

Japan's Nikkei 225 index fell 2.1% in afternoon trading, while the broader Topix index dropped 1.64%.

The benchmark Nikkei 225 has fallen 8.3% from a record high hit in late March.

Investors are waiting for the Bank of Japan's monetary policy decision on Friday. It will be closely watched for inflation outlook against a backdrop of a weakening yen, higher oil prices and strong wage growth.

The yen slipped past 155 against the U.S. dollar on Thursday, touching a new 34-year low.

— Shreyashi Sanyal

SK Hynix posts first operating profit in four quarters, stock slides almost 3%

Shares of South Korean chipmaker SK Hynix slid almost 3% despite the company posting its highest operating profit in almost two years.

The chipmaker recorded 2.89 trillion South Korean won ($2.1 billion) in operating profit for the first quarter of 2024, a 734% jump year on year, with net profit coming in at 1.92 trillion won.

Revenue for the fourth quarter came in at 12.43 trillion won, an all-time quarterly high.

SK Hynix explained that this was due to an increase in the sales of AI server products, "backed by its leadership in AI memory technology."

The company also added that it "believes that it has entered the phase of a clear rebound, following a prolonged downturn."

— Lim Hui Jie

South Korea first-quarter GDP climbs 3.4%, fastest quarterly growth since Q4 2021

South Korea posted GDP growth of 3.4% in the first quarter, beating the 2.4% expected by economists polled by Reuters and marking its highest quarterly growth since the fourth quarter of 2021.

On a quarter-on-quarter basis, GDP rose 1.3%, also beating Reuters expectations of 0.6%.

Exports from South Korea in the first quarter rose 0.9%, as exports of IT items, such as cellular phones, increased. Imports contracted 0.7%, owing to decreased imports of electronic equipment.

— Lim Hui Jie

iCapital's Anastasia Amoroso sees S&P 500 ending at 5,500 this year

iCapital chief investment strategist Anastasia Amoroso believes there is a good chance the S&P 500 could rise to 5,500 by year's end.

The broader market index closed at 5,071.63 on Wednesday afternoon. This target would mark an 8% increase for the benchmark.

"I think investors are getting another entry point here that's quite attractive," she said on CNBC's "Closing Bell" on Wednesday afternoon. Amoroso specifically highlighted semiconductor stocks for their potential to outperform going forward.

As catalysts for an encouraging equities backdrop, the strategist cited strong corporate earnings and consumer spending, alongside a pickup in global manufacturing momentum.

— Lisa Kailai Han

Stocks making the biggest moves after the bell: Meta, IBM and more

Here are the stocks moving the most in extended trading hours:

• Meta Platforms — Shares of the tech titan plummeted about 12% after the parent company of Facebook issued lighter-than-expected second-quarter revenue guidance.
• International Business Machines — The global information technology company slid 6.6% after hours. First-quarter revenue of $14.46 billion missed consensus estimates of $14.55 billion, per LSEG.
• Chipotle Mexican Grill — Shares of the burrito chain rose more than 3% after posting first-quarter profits that were well above analysts' estimates.

— Lisa Kailai Han

Stock futures open lower

Stock futures opened lower Wednesday night.

Dow futures slipped around 0.3% shortly after 6 p.m. ET. S&P 500 futures lost 0.7%, while Nasdaq 100 futures fell nearly 1.2%.

— Lisa Kailai Han