Due to the recession in the U.S. economy, the New York Stock Exchange opened lower on the 30th (local time).
On this day at the New York Stock Exchange (NYSE), the Dow Jones Industrial Average opened down 237.2 points (0.59%) at 40,290.41. The benchmark for large-cap stocks, the Standard and Poor's (S&P) 500 index, started down 61.4 points (1.10%) at 5,499.44, while the technology-focused Nasdaq composite index began down 361.3 points (2.07%) at 17,099.977.
Ahead of the opening, the U.S. Department of Commerce announced that the preliminary growth rate of gross domestic product (GDP) for the first quarter was reported at an annualized -0.3%. This figure is significantly lower than both the growth rate of the previous quarter (2.4%) and the expert forecast (0.3%) compiled by Reuters, marking the first recession in three years since 2022.
The economy contracted as imports surged ahead of U.S. President Donald Trump's high tariff implementation in April. According to the U.S. Bureau of Economic Analysis (BEA), imports in this quarter surged by 41.3%, far surpassing the export growth rate of 1.8%. Net exports (exports - imports) plunged by 4.83% from the previous quarter, marking the largest decline on record.
Nonetheless, consumer expenditure continued to rise, preventing a further decline in growth rates. Consumer expenditure in the first quarter increased by 1.8%, exceeding market expectations of 1.2%. Private domestic final sales, which reflect the underlying trend of demand in the U.S. economy (sum of consumption expenditure and private fixed investment), grew by 3.0% in the first quarter, widening the growth compared to the last quarter of the previous year (2.9%).
Experts are concerned about stagflation (recession amid high inflation). Adam Posen, president of the Peterson Institute for International Economics (PIIE), estimated a 65% chance that the U.S. would fall into recession within the next year, forecasting that prices would also soar. Last month, the 12-month average expected inflation in the U.S. was 7%, the highest level since November 2022.
Meanwhile, President Trump attributed the poor economic performance for the first quarter to his predecessor, Joe Biden. In a post on his social media platform Truth Social, he stated, "It is solely because Biden left behind bad indicators," adding, "Once the growth trend starts, it will reach unprecedented levels."