Wall Street Trembles as Economic Contraction Grips Markets

Wall Street's indexes fell as U.S. economic data revealed a first-quarter contraction, raising concerns over the impact of tariffs and global trade tensions. The Commerce Department's GDP report showed a decline, with inflation and payroll data further signaling uncertainty. Markets brace for possible Fed interest rate cuts.

Wall Street's key indexes witnessed a downturn on Wednesday following data indicating the U.S. economy contracted for the first time in three years during the first quarter, intensifying concerns over U.S. tariffs and the broader global trade war.

The Commerce Department's gross domestic product report took center stage amid a flurry of data releases, revealing a 0.3% contraction for Q1 against expectations of 0.3% growth, as per economists polled by Reuters. Notably, private payroll growth slackened more than anticipated in April, and the personal consumption expenditure index, the Federal Reserve's favored inflation gauge, aligned broadly with predictions.

The Dow Jones Industrial Average slipped by 219.69 points, the S&P 500 fell by 47.41 points, and the Nasdaq Composite lost 212.90 points. Economically sensitive sectors, including the energy index, were particularly hit. As investors watch major tech companies' forthcoming earnings results, increased concerns loom over investment slowdowns in AI.

(With inputs from agencies.)