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Stocks & Shares

Stocks drop on disappointing tech forecast

Global stocks

Tepid U.S. GDP data and Meta’s plunge weighed on equities

Stocks snapped a three-day winning streak on Thursday as disappointing forecasts from Facebook and Instagram owner Meta hit the tech sector, and Japan’s yen dipped through 155 per dollar for the first time since 1990.

Tepid U.S. GDP data and Meta’s plunge weighed on equities.

U.S. Treasury yields reached their highest in more than five months after the data showed signs of persistent inflation, lowering hopes that the Fed will trim interest rates anytime soon.

U.S. Treasury Secretary Janet Yellen told Reuters that U.S. economic growth was likely stronger than suggested by weaker-than-expected data on first-quarter output and said the Biden administration was keeping all options open to respond to threats from China’s excess industrial capacity.

Gold prices increased, and oil prices ended higher.

MSCI’s gauge of stocks across the globe dropped 3.87 points, or 0.51%, to 755.59.

The DJIA dropped 375.12 points, or 0.98%, to 38,085.80, the S&P 500 shed 23.21 points, or 0.46%, to 5,048.42 and the Nasdaq Composite shed 100.99 points, or 0.64%, to 15,611.76.

Shares of Alphabet and Microsoft gained in extended hours trading after both companies reported quarterly results that beat Wall Street estimates. Nonetheless, Intel shares declined 8% in extended hours trading after it forecast second-quarter revenue and profit below market estimates.

European shares ended 0.7% lower, paring losses after dropping more than 1% intraday, hit by bleak earnings from consumer giant Nestle and Dutch digital payments company Adyen.

London’s FTSE 100 held onto gains and hit a record high as UK-listed miner Anglo American soared on a $39 billion buyout offer from Australian rival BHP.

Beyond corporate earnings, investors were digesting the sharper-than-expected slowdown in first-quarter U.S. economic growth.

Despite the expected GDP slowdown in 2024, there are no imminent signs of a recession, said Stephen Rich, chairman and chief executive at Mutual of America Capital Management.

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