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Stocks fell on Wednesday, spoiling a stock market comeback in April, as data showed the U.S. economy contracted in the first quarter, raising fears the economy was slipping into a recession under the weight of President Donald Trump’s flurry of policy moves, especially on trade.
The Dow Jones Industrials tumbled 556.67 points, or 1.4%, to 39,970.95.
The S&P 500 index slid 89.83 points, or 1.6%, to 5,471.49
The NASDAQ Composite weakened 361.27 points, or 2.1%, to 17,100.05.
First Solar shares plunged more than 9% after chief executive Mark Widmar said that the president’s tariffs pose a “significant economic headwind” for the solar technology company’s manufacturing facilities, slashing its full-year forecast in response. GE Healthcare also cut its outlook for the year to account for the impact from tariffs.
Meanwhile, shares of artificial intelligence chip darling Nvidia fell more than 2% in sympathy with server maker Super Micro Computer’s 16% decline. Super Micro issued weak preliminary results for the fiscal third quarter.
First quarter gross domestic product declined at a 0.3% rate, the Commerce Department said on Wednesday, a rapid reversal from a 2.4% increase in the fourth quarter. Imports surged by 41% in the last quarter, subtracting from GDP, as companies sought to get ahead of Trump’s global trade fight.
The report also showed a big slowdown in consumer spending and a decline in government spending amid Elon Musk’s DOGE cuts.
A separate report from ADP also signaled an economic slowdown, with private payroll growth slowing in April to just 62,000 during the month. That was well below the Dow Jones consensus estimate from economists of 120,000.
The major averages ended Tuesday higher after Commerce Secretary Howard Lutnick reported the White House was close to announcing a trade deal, but didn’t name the country.
But the selling returned on Wednesday, with the weak GDP report raising concerns that the chaos caused by Trump’s policy flurry may have already pushed the economy toward a recession before any substantial trade deals are enacted.
In a post on Truth Social, Trump blamed a “Biden ‘Overhang’” following the weak numbers, telling people to “BE PATIENT!!!” and that his policies “will take a while” to take effect.
Prices for the 10-year Treasury stayed put, keeping yields at Tuesday’s 4.18%.
Oil prices retreated 87 cents to $59.55 U.S. a barrel.
Prices for gold were tarnished $17.10 to $3,316.50 U.S.