Wednesday Afternoon Coffee - Markets Update - 30 Apr 2025 - Markets Slide as U.S. GDP Shrinks; Dollar Rises on Economic Jitters

The Trade Academy Team
Apr 30
3 min read

Markets Update: Wall Street stumbled Wednesday as fresh data showed the U.S. economy contracted in the first quarter for the first time since 2022, fueling recession fears and a broader risk-off sentiment across global markets. Meanwhile, the U.S. dollar climbed as traders priced in aggressive Federal Reserve rate cuts before year-end.

Global Markets Roundup: 30 Apr 2025

Stocks Drop on Weak Growth and Tech Selloff

Major indexes ended lower across the board following the Commerce Department's advance estimate of a 0.3% GDP contraction in Q1—sharply below forecasts for modest growth and marking the first decline in three years. Economists had expected a 0.3% increase, though some banks, including Goldman Sachs and J.P. Morgan, had predicted even steeper drops.

Dow Jones Industrial Average: -219.69 points (-0.54%) to 40,307.93S&P 500: -47.41 points (-0.85%) to 5,513.42Nasdaq Composite: -212.90 points (-1.23%) to 17,248.42. The Russell 2000 fell 1.3% as economically sensitive small-caps were hit harder, while energy stocks led sector losses, down 3%. Declines were broad-based, with the "Magnificent Seven" mega-cap tech names weighing on sentiment.

Meta fell 2.6% and Microsoft lost 0.9% ahead of earnings, while AI darling Super Micro Computer plunged nearly 15% after trimming its Q3 forecast. Snap also sank 15% after withholding a Q2 outlook. Caterpillar erased pre market gains and closed down 0.7% despite better-than-expected earnings.

Dollar Gains as GDP, Inflation Data Fuel Fed Cut Bets

The dollar DXY surged after the GDP report showed a surprise contraction driven largely by a 41.3% surge in pre-tariff imports, which weighed on net growth. Consumer spending slowed to 1.8% from 4% in Q4 but remained resilient, particularly in services like healthcare.

The euro EURUSD dropped 0.3% to $1.1351, while the dollar gained 0.4% against the yen to 142.96. Sterling fell 0.6% to $1.3332, though it notched a 3.8% gain for April—its biggest monthly rise against the greenback in over two years.

A separate report showed U.S. personal income rose 0.5% in March and spending grew 0.7%, both beating forecasts. The PCE price index—used by the Fed to track inflation—cooled to 2.3% year-over-year, with core inflation easing to 2.6%, bolstering expectations for rate cuts.

Fed funds futures now reflect a full percentage point in rate cuts by year-end, bringing the expected target range to 3.25%-3.50%.

Commodities Hit by Growth Concerns

Crude oil prices tumbled to multi-year lows as fears of weaker demand intensified. WTI crude closed down $2.21 at $58.21/barrel, its lowest level since February 2021. Brent fell $1.12 to $63.13, with April marking its steepest monthly drop since late 2021—down 15%.

Gold slipped for a second straight session, with June futures down $13.40 to $3,320.50/oz, as the rising dollar offset safe-haven demand.

In agriculture, sugar fell 0.9% to 17.46 cents/lb, the lowest in 2.5 years. Corn rose to $4.76¼/bushel, rebounding from recent lows, while wheat gained to $5.33½. Soybeans dropped 10¼ cents to $10.42½.

Outlook

Markets are closing April on shaky ground. Despite a partial rebound earlier in the month, major indexes are poised for their first monthly decline since October. Wednesday also marked 100 days since President Trump took office, a stretch defined by volatile policy swings and growing concern over trade disruptions.

Investors will look to Friday’s nonfarm payrolls report and upcoming Fed communications for further clarity as policy, inflation, and geopolitics continue to reshape the economic landscape.

Looking forward refer to the economic calendar below to see the upcoming events scheduled for today and the rest of the week.

General news - Information source from multiple newswires.

The article and the data is for general information use only, not advice!

The Trade Academy Team