FX.co ★ U.S. Stocks May Fall Sharply On Disappointing Earnings, GDP Data

After a less than impressive session previously, stock predictions suggest a dip in early trading on Thursday. Indications point to a major drop, with the S&P 500 futures decreasing by approximately 1.1 percent.

Earnings reports from Meta Platforms, the parent company of Facebook, have generated a negative reaction on Wall Street, as stocks plummeted by 15.5 percent during pre-market trading. Despite surpassing first-quarter estimates, Meta Platforms’ lower-than-expected revenue guidance for the second quarter has contributed to investor concern.

IBM Corp, a tech heavyweight, may also experience pushback following weaker than expected revenues for their first quarter. Furthermore, IBM announced a plan to purchase HashiCorp for $35 per share in cash, which equates to an enterprise value of around $6.4 billion.

However, not all Dow components are following the same trajectory. Both Merck and Honeywell are enjoying a pre-market surge after their first quarter results exceeded market predictions.

After the Commerce Department released a report showing a smaller than predicted growth for the U.S. economy in the first quarter of 2024, further declines in futures were observed. The report pointed out a 1.6 percent increase in the gross domestic product, following a 3.4 percent surge in the final quarter of 2023, despite analysts predicting a 2.5 percent rise.

The significant dip in GDP growth can be attributed to a slowdown in consumer spending, exports, and government spending at state and local levels, coupled with a decrease in federal government spending.

In contrast, a Labor Department report revealed an unexpected drop in first-time unemployment benefit claims for the week ending April 20th. The number of initial jobless claims decreased to 207,000, a 5,000 dip from the previous week - surprising economists who had predicted an increase to 214,000.

Following a cautious trading performance on Wednesday, we observed a mixed response among major markets. While the Dow dipped slightly, the S&P 500 saw a tiny increase and the Nasdaq ended on a marginal rise.

Thursday's trading session witnessed mixed performance across the Asia-Pacific, with Japan's Nikkei 225 Index plummeting by 2.2 percent while Hong Kong's Hang Seng Index rose by 0.5 percent.

European markets also displayed a mixed bag of results - the U.K.'s FTSE 100 Index rose by 0.7 percent whilst the German DAX Index and the French CAC 40 Index fell by 0.5 percent and 0.8 percent respectively.

In commodity trading, crude oil futures are exhibiting an upward curve after a decrease on Wednesday, while gold futures are slightly down. On the currency front, the U.S. dollar has a higher value against the yen and approximately holds its value against the euro.