Markets opened sharply lower after government data showed the US economy shrank by an annual rate of 0.3 percent in the first quarter, amplifying worries about a recession amid US President Donald Trump’s fast-changing tariff policies.
But equity markets moved gradually higher throughout the day, rising after mid-morning data showed personal spending in March actually topped earlier estimates.
A late-day surge lifted two of the three indices into positive territory.
The Dow Jones finished at 40,669, up 0.4 percent and more than 920 points above its session lows.
The S&P 500 advanced 0.2 percent to 5,569, while the Nasdaq declined 0.1 percent to 17,446.
Consumers “despite what they’re saying they still seem to be spending,” said Jack Ablin of Cresset Capital, alluding to survey data showing weak consumer sentiment.
Part of the contraction in GDP was due to a surge in imports from businesses seeking to get ahead of Trump’s myriad tariffs.
Besides the GDP data, payroll firm ADP reported that private sector employment grew by 62,000 in April, a sharp slowdown from a revised 147,000 in March.
Ablin said Friday’s jobs data for April will be “one of the most important jobs reports we’ve seen for a while” in light of uncertainty about the economy.
Among companies reporting results, Starbucks shares fell 5.7 percent after the coffee giant reported a 50-percent fall in profits to US$384.2 million.
But travel tech company Booking Holdings rose 3.9 percent as it reported higher quarterly revenues even as it pointed to “uncertainty around the near-term geopolitical and macroeconomic environment.” (AFP)
