Stock Market Today: Stocks tumble as Q1 GDP sets up recession risks

U.S. equity futures turned lower in early Wednesday trading, while Treasury bond yields and the dollar held steady, as investors braced for a key series of economic data releases and a pair of megacap tech earnings after the bell to close out the final trading day of the month. 

Updated at 8:50 AM EST

Shrinkage 

The U.S. economy contracted sharply over the first three months of the year, according to an early Commerce Department estimate published Wednesday, as the impact of tariffs triggered a record surge in imports and slowed domestic spending.

First quarter GDP was pegged at -0.3%, down from the 2.4% pace recorded over the final three months of last year and well shy of Wall Street's forecast for an advance of around 0.4%. The contraction marks the first time the economy has shrank since the first quarter of 2022.

Overall consumption slowed to 1.2% from 2.7% over the final months of last year, the data indicated, while government spending contracted 0.25% following a rise of 0.52% over the fourth quarter of last year.

Stocks extended declines following the data release, with futures contracts tied to the S&P 500 indicating an opening bell decline of around 71 points and the Nasdaq called 350 points lower.

Benchmark 10-year Treasury note yields, meanwhile, rose 5 basis points to 4.212% following the release, and the faster-than-expected PCE reading, while 2-year notes edged 3 basis points higher to 3.671%.

The U.S. dollar index, which tracks the greenback against a basket of six global currencies, was last seen 0.2% higher on the session at 99.429.

Updated at 7:11 AM EST

Early earnings

Caterpillar  (CAT)  shares jumped in early trading, after the industrial equipment maker missed analyst estimates on both the top and bottom lines of its first-quarter-earnings report but held to its full-year sales forecast.

The Dow component was last marked 1.8% higher in premarket trading to indicate an opening-bell price of $313.

GE Healthcare Technologies  (GEHC) , meanwhile, powered higher even as the medical device maker and GE spinoff cut its full-year profit forecast amid tariff uncertainty tied to key export markets in China, Canada and Mexico.

GE Healthcare shares were last seen 5.7% higher in premarket trading to indicate an opening bell price of $71.99 after it posted better-than-expected first-quarter earnings.

$CAT | Caterpillar Q1 2025 Earrings
- Adj EPS $4.25 (est $3.33)
- Rev $14.25B (est $14.69B)
- Adj Oper Income $2.61 (est $2.64B)
- EPS $4.20, $5.75 Y/Y
- Machinery, Energy & Transportation Rev $13.38B, -11% Y/Y— LiveSquawk (@LiveSquawk) April 30, 2025

Stock Market Today

Stocks ended higher across the board Tuesday, extending the S&P 500's recent winning streak to six sessions, the longest since late November. Markets looked to claw back some of their sharp April declines amid the biggest post-inauguration selloff since 1973.

Trade policy, tariff uncertainty and slowing earnings growth continue to dominate market concerns, and President Donald Trump's move yesterday to ease levies on the auto industry added a bullish tenor to Tuesday's trading session.

A key reading of consumer confidence, however, slumped to the lowest level in nearly five years last month, and trade figures showed the biggest tally of U.S. imports on record as businesses front-loaded purchases ahead of what Trump called Liberation Day tariffs.

That surge, which included a records goods deficit of $162 billion, is likely to shave nearly 2 percentage points from first-quarter GDP. Economists now are looking for a contraction in growth when the Commerce Department publishes its initial estimate at 8:30 a.m. Eastern Time.

Prior to that, payroll processing group ADP will publish its April employment report at 8:15 a.m., with analysts looking for a headline private sector hiring tally of around 114,000 and slowing wage gains for job changers in a softening labor market. 

The Bureau of Economic Analysis will also publish it March reading of PCE inflation for March, the Federal Reserve's preferred gauge, which is expected to show the final month of price pressure easing ahead of the broader tariff impact on consumer spending. 

Investors will also eye the start of the megacap tech earnings season with updates from Microsoft  (MSFT)  and Meta Platforms  (META) , both of which are slated for after the close of trading. Magnificent 7 peers Apple  (AAPL)  and Amazon  (AMZN)  are slated to report after the close of trading on Thursday. 

"While tariff uncertainty has been front and center for the markets and the trade wars/negotiations is a key X variable for tech stocks moving ahead, [Wall] Street is laser-focused to hear from Big Tech titans to get a better grasp on the demand and spending patterns abound from enterprises and consumers," said Wedbush analyst Dan Ives.

Related: Analyst reboots Apple stock price target ahead of earnings

Heading into the start of the trading day on Wall Street, futures contracts tied to the S&P 500, which is down 0.9% in April, are priced for a modest 6 point opening bell decline.

Futures linked to the Dow Jones Industrial Average, meanwhile, are priced for a 28-point gain while the tech-focused Nasdaq is called 50 points lower.

Benchmark 10-year Treasury note yields were last trading at 4.162%, the lowest in three weeks, heading into the start of the New York session, while the U.S. dollar index was marked 0.14% higher against a basket of its global peers at 99.373.

Global oil prices continued their recent slump, largely tied to growth concerns and trade policy, and likely to close out April with their biggest monthly decline in three and a half years.  

WTI futures for June delivery, which are tightly linked to U.S. gasoline prices, were last seen 61 cents lower on the session at $59.81 per barrel.

More Economic Analysis:

• Wall Street overhauls S&P 500 price targets as tariff selloff accelerates
• Inflation would like a word, please
• Stocks could bounce, but big bank earnings hold the cards

In overseas markets, a stronger-than-expected reading for first-quarter GDP growth in the eurozone, which was pegged at 0.4%, as well as a solid set of bank earnings gave the Stoxx 600 a boost, with the benchmark last seen 0.34% higher in midday Frankfurt trading.

Britain's FTSE 100, meanwhile, was last seen 0.12% higher on the day in London.

Overnight in Asia, Japan's Nikkei 225 rose 0.57% on the final trading day of April, taking the benchmark to its first monthly gain of the year, following optimistic comments on U.S. trade talks from government envoy Ryosei Akazawa,

The regional MSCI ex-Japan benchmark, meanwhile, was last marked 0.92% higher into the close of trading.