Inflation and growth concerns cause the Dow to drop more than 300 points, while Meta drags the S&P 500 lower.

The latest U.S. economic data revealed a sharp slowdown in growth and persistent inflation, causing stocks to tumble on Thursday.

The stock slid 340 points, or 0.8%, due to steep declines in and . The stock dropped 0.4%, and the stock lost 8%.

The Bureau of Economic Analysis reported that U.S. gross domestic product grew 1.6% in the first quarter, while economists surveyed by Dow Jones predicted GDP growth of 2.4% for the same period.

The report revealed that consumer prices rose at a 3.4% rate in the latest quarter, which is higher than the previous quarter's 1.8% increase. This has raised concerns about persistent inflation and whether the Federal Reserve will be able to lower interest rates in the near future. Both sets of data suggest a stagflationary environment, which could pose a challenge for policymakers in the future.

According to Chris Larkin, managing director of trading and investing at E*Trade from Morgan Stanley, the market's deepest pullback since last year is unlikely to ease pressures in the short term, as the numbers do not provide a clear signal for either bulls or bears.

Traders adjusted their expectations for Federal Reserve monetary policy after the GDP print, with the CME FedWatch Tool indicating that there will only be one interest rate cut this year.

Tech tumble

The sluggish GDP intensified the stress in the market, which was already grappling with worries about a decline in technology earnings growth.

The stock's biggest one-day decline since October 2022 was 12% after the social media giant issued light revenue guidance for the second quarter. Additionally, it fell 8% after missing consensus estimates for first-quarter revenue.

Despite the focus on generative AI in the past nine months, Meta's failure to meet its revenue growth projections in Q1 is prompting doubts about the ease of monetizing this technology, as traders were led to believe by management, according to Thierry Wizman, global FX and rates strategist at Macquarie.

Meta's report raises concern ahead of other big tech releases, including Facebook, which is also slated to post earnings after the close Thursday.

Meta Platforms has the support of a tech investor, but the stock requires additional support.

Despite Thursday's selloff, technology investor Paul Meeks remains steadfast and believes it is premature to purchase shares at this time.

The co-chief investment officer and portfolio manager at Harvest Portfolio Management stated that the stock requires "support for at least a few trading sessions" to ensure that the short-term selling has been exhausted.

Meeks views himself as a long-term investor in the stock, but is holding off on making any decisions until additional earnings reports become available, including those from his preferred AI companies.

— Samantha Subin

1:15 p.m.: Meta's AI spending could benefit these stocks

The stock price of Meta has fallen nearly 12% during midday training after investors learned that it may take time for the company's increased investments in artificial intelligence to yield significant benefits. However, this decline could benefit other companies, such as Super Micro, Arista Networks, Pure Storage, Broadcom, and AMD, as Meta's spending could translate into increased revenue for these companies, according to Wells Fargo.

In the fourth quarter of 2023, Meta was estimated to be a 10% customer for Super Micro, while Pure Storage had Meta as a customer last year.

Meta accounted for approximately 21% of Arista Networks' revenue last year, according to the company's CEO.

Meta, also known as Facebook, has been using Broadcom's custom networking chips and was one of the first customers for its new AI chip, the MI300X.

Despite the broader market's steep decline, chip stocks were trading higher on Thursday.

—Kristina Partsinevelos, Christina Cheddar Berk

12:41 p.m.: Check out the stocks making headlines in midday trading:

• Goldman Sachs initiated coverage of the lingerie company with a sell rating, causing shares to drop 3.5%. Despite this, the firm is constructive on the company's long-term prospects, citing its loyalty initiatives and renewed merchandise focus.
• On Wednesday, Meta, the Facebook-parent company, reported lighter-than-expected second-quarter revenue guidance and CEO Mark Zuckerberg discussed spending in areas such as AI and mixed reality that are not currently profitable.
• The stock prices of major tech companies fell on Thursday, with Meta's disappointing revenue outlook leading the decline. Specifically, Meta's shares dropped by 3%, while the stock prices of other tech giants shed around 2%.
• Monster Beverage's shares were pushed roughly 3% lower after JPMorgan downgraded the company from overweight to neutral due to "cost pressure."

For the full list, read here.

— Pia Singh

Geopolitical tensions, falling rate cut expectations, and a recent equity sell off are putting pressure on developed markets.

During the week ending April 17, all major EPFR-tracked Developed Markets Equity Fund groups, except for Canada Equity Funds, experienced net redemptions, according to EPFR.

In five weeks, U.S. equity funds experienced their third outflow.

— Hakyung Kim

12 p.m.: Thursday sell-off pulls Dow into negative territory on the week

The Dow fell below its flatline for the week on Thursday, highlighting the severity of the daily decline.

Despite pacing for a gain of more than 1% heading into the session, the blue-chip average tumbled more than 1.5% in late morning trading, leaving it down about 0.4% on the week.

In 2024, the Dow remained within 0.5% of its flatline despite the decline.

Although the S&P 500 and Nasdaq Composite declined in Thursday's session, they were still on track to end the week with gains. The S&P 500 was set to rise by 0.8%, while the Nasdaq was aiming for a 1% increase.

— Alex Harring

On Thursday, ETFs focused on the chip industry were a positive outlier for investors.

Semiconductor ETFs are performing well on Thursday even as the broader market struggles.

The Invesco PHLX Semiconductor ETF (SOXQ) outperformed the VanEck Semiconductor ETF (SMH) by approximately 0.2% during the trading session.

The iShares Semiconductor ETF (SOXX) experienced a 0.5% increase, with Nvidia contributing to the rise by gaining over 2%. Despite a 10% sell-off last week, Nvidia is now recovering some of those losses.

— Jesse Pound

10:46 a.m.: IBM and Caterpillar lead Dow lower

On Thursday, the Dow plummeted nearly 700 points, heading towards its worst day of the year.

The 30-stock index was led into the red, dropping more than 9% and 7%, respectively, on the back of earnings. Both companies missed analyst estimates for revenue in the quarter.

Microsoft and Amazon were the next poorest performers, losing approximately 3.97% and 3.95% respectively.

In the session, more than two out of every three Dow stocks traded down, except for Merck, which reported better-than-anticipated earnings this morning, and UnitedHealth, which rose more than 1%.

— Alex Harring

10:22 a.m.: Meta shares on pace for worst day since October 2022

On Thursday, the stock's shares plummeted 11.34%, putting it on track for its worst day since October 27, 2022, when Meta declined 24.56%.

Despite Meta's better-than-expected earnings in the first quarter, shares fell after the company issued weak revenue guidance and CEO Mark Zuckerberg's comments on long-term investments in artificial intelligence and the metaverse intensified the sell-off.

— Hakyung Kim

10:04 a.m.: New York Stock Exchange decliners lead advancers 10-1

On Thursday, 210 NYSE-listed stocks advanced, while 10 fell for every one that rose, as the latest GDP report and new tech earnings dampened investor sentiment.

— Fred Imbert

The U.S. GDP report was a disappointment for investors.

If inflation remains stubborn, a dismal U.S. GDP report could signal trouble for the equity market, according to one investor.

Chris Zaccarelli, investment chief at Independent Advisor Alliance, wrote that this report was the worst of both worlds, as economic growth is slowing and inflationary pressures are persisting.

If the market does not see economic growth and corporate profits increasing, and the Fed does not see inflation coming down in a persistent manner, then that will be bad news for markets.

The upcoming PCE report, which is the Fed's preferred measure of inflation, will have higher stakes for personal consumption expenditures, as investors hope it will show a decrease in pricing pressures after the March consumer inflation report exceeded expectations.

— Sarah Min

9:33 a.m.: Stocks fall after GDP data shows slowing economic growth

On Thursday, stocks began the day lower as equities sold off following new GDP data that indicated a slowing economy.

The stock market experienced a decline, with the Dow Jones Industrial Average, S&P 500, and Nasdaq Composite all losing ground.

— Brian Evans

8:58 a.m.: 10-year Treasury yield jumps to highest level since November

Since the release of the GDP report, the stock market surpassed 4.7% and reached its highest point since November.

The Federal Reserve may hold rates steady until inflation recedes due to rising prices, which could slow economic growth and push the central bank toward rate cuts.

— Jesse Pound

8:51 a.m.: Gross domestic product slowed in the first quarter

The Bureau of Economic Analysis reported that U.S. gross domestic product growth slowed in the first quarter, causing stock futures to decline before the market opened.

While economists predicted growth of 2.4% in the first quarter, GDP only expanded by 1.6%.

— Brian Evans