Wall Street experienced a significant downturn on Thursday, despite the backdrop of a robust 4.9% annualized growth in the US economy during Q3 and an impressive 4% surge in consumer spending, marking the highest level since the previous year. This unexpected downturn saw both the Dow Jones Industrial Average and the Nasdaq Composite shed over 0.76% and 1%, respectively, as investor concerns mounted in anticipation of a looming economic slowdown.
In the midst of these turbulent market dynamics, tech behemoths Alphabet (NASDAQ: GOOGL) and Meta Platforms (NASDAQ: META) fell short of leaving a lasting impression on investors, even though they outperformed revenue and earnings expectations. Of particular note, Meta Platforms saw a 3.7% decline in its stock price following a cautious warning about “volatility” in the advertising market. This announcement caught many investors off guard, especially in light of the company’s recent surge in quarterly profit.
Market sentiments took a further hit as Alphabet and Tesla (NASDAQ: TSLA) joined the ranks of underperforming stocks, adding to investor unease. In contrast, toy manufacturers Hasbro (NASDAQ: HAS) and Mattel (NASDAQ: MAT) watched their stock values plummet, while pharmaceutical giant Merck and tech stalwart IBM (NYSE: IBM) enjoyed gains.
Commodity prices mirrored the prevailing market trend, with both West Texas Intermediate and Brent crude oil witnessing a dip of 2.3%. Bitcoin also experienced a 1.6% decline, and the 10-year yield fell by 10.6 basis points.
The reaction of Wall Street to the strong Q3 GDP growth highlights the intricate interplay between economic indicators and investor sentiment. Despite the upbeat economic data, market participants remain cautious.
