Dow, Nasdaq, S&P 500 crash after weak US GDP data; April ends in deep red as recession fears mount

The US economy unexpectedly contracted by 0.3 per cent in the January–March quarter, snapping a two-quarter growth streak and triggering a brutal selloff on Wall Street. All three major indices closed sharply lower on Wednesday: the Dow fell 690 points (1.7 per cent), the S&P 500 lost 2 per cent, and the Nasdaq slid 2.6 per cent.

The GDP decline was driven largely by a 41 per cent spike in imports, as businesses rushed to stock up ahead of potential tariffs. The data, released by the Commerce Department, sharply contrasted with the 2.4 per cent expansion in the December quarter.

Private payrolls added to the gloom, with ADP reporting only 62,000 new jobs in April  nearly half of what markets had expected.

Trade jitters return as imports surge 41%

One of the biggest drags on Q1 GDP was a staggering 41 per cent surge in imports — largely due to companies pre-emptively front-loading goods to avoid new tariffs. Market sentiment, which had partially stabilised after early April’s tariff-related selloff, took another hit as investors reassessed risks tied to global supply chains and Trump’s recent signals on more reciprocal duties.

Adding fuel to the fire, private payrolls data from ADP showed just 62,000 new jobs were added in April, well below Street estimates of 120,000. This soft labour print added to concerns that the US economy could be sliding into a slowdown.

Trump blames Biden, urges patience

Reacting to the GDP miss, President Trump posted on Truth Social, deflecting blame to the Biden administration. He appealed to Americans to remain patient as his policy resets take effect. However, investors remained wary, especially with inflation still sticky and the Fed unlikely to cut rates anytime soon.

Tech, green energy stocks take a beating

On the stock-specific front, Nvidia sank nearly 4 per cent after server maker Super Micro Computer warned of weak Q3 earnings, triggering an 18 per cent crash in its stock. First Solar shares dropped over 10 per cent after its Q1 EPS of $1.95 missed estimates of $2.49, with the company also cutting its full-year outlook.

Snap shares nosedived 16 per cent after the firm declined to issue guidance, citing macro uncertainty. While its Q1 revenue came in slightly above expectations at $1.36 billion, the company reported a per-share loss of 8 cents.

April ends on a grim note despite mid-month rebound

Earlier in the month, Wall Street had staged a sharp recovery from April 2 lows triggered by Trump’s tariff announcement. The S&P 500 was down nearly 20 per cent from its February peak at one point. Hopes of a truce with India and China had helped reduce losses. But Wednesday’s renewed drop has erased most gains, reinforcing that investor sentiment remains fragile heading into May.