The New York Stock Exchange closed mixed. Although the U.S. economy contracted for the first time in three years in the first quarter, raising concerns, expectations that trade negotiations between the U.S. and China would proceed stimulated investor sentiment.
On the 30th (Eastern Time), the Dow Jones Industrial Average closed at 40,669.36, up 141.74 points (0.35%) from the previous session on the New York Stock Exchange (NYSE). The Standard & Poor's (S&P) 500 index rose 8.23 points (0.15%) to 5,569.06, while the Nasdaq Composite index fell 14.98 points (0.09%) to close at 17,446.34.
The announcement of the contraction of the U.S. economy in the first quarter shook the market. The U.S. Department of Commerce preliminarily reported that the seasonally adjusted GDP growth rate for the first quarter was -0.3% on an annualized basis compared to the previous quarter. This represents a significant slowdown from a growth rate of 2.4% in the fourth quarter of last year. The U.S. quarterly GDP has contracted for the first time since the first quarter of 2022.
Major stock indices, which started with a sharp drop due to this news, fell more than 2% during the day. The Nasdaq index plummeted to -2.87%. However, as bargain-hunting gradually flowed in during trading, the indices nearly recovered their losses by the market close.
Earlier, major institutions on Wall Street had anticipated a contraction in the first quarter. JPMorgan recently lowered its growth forecast for the first quarter to -1.5%, while investment bank Jefferies adjusted its forecast to -0.2%, and BNP Paribas lowered its estimate to -0.6%.
In the afternoon, expectations concerning U.S.-China trade negotiations supported stock prices. The Central China Television (CCTV) affiliated social media (SNS) account 'Yuyuantantian' posted in the afternoon with the title 'Exclusive report' that 'the U.S. has been actively contacting China through various channels to discuss tariff issues recently.'
In response to this news, the S&P 500 index briefly surged nearly 30 points. Although the surge was quickly moderated as the U.S. government did not react to the news, the expectations persisted throughout the afternoon.
By sector, consumer discretionary dropped by 1%, while energy fell by more than 2%. Communication services and utilities also declined.
The Chicago Board Options Exchange (CBOE) Volatility Index (VIX) rose by 0.53 points (2.19%) to record 24.70.