U.S. gross domestic product expanded 1.6% in the first quarter, the Bureau of Economic Analysis said. Economists polled by Dow Jones forecast GDP growth would come in at 2.4%.
Along with the downbeat growth rate for the quarter, the report showed the personal consumption expenditures price index increased at a 3.4% pace, well above the previous quarter’s 1.8% advance. This raised concern over persistent inflation and put into question whether the Federal Reserve will be able to cut rates anytime soon. Taken together, both findings suggest a stagflationary environment — that is, a combination of slowing economic growth and rising inflation — and could add another headwind for policymakers moving forward.
“In the short term, the numbers don’t appear to be a green light for either bulls or bears…the uncertainty is unlikely to ease pressures in a market experiencing its deepest pullback since last year,” said Chris Larkin, managing director of trading and investing at E*Trade from Morgan Stanley.
Following the GDP print, traders moved down expectations for an easing of Federal Reserve monetary policy. Fed funds futures trading data suggests there will be just one interest rate cut this year, according to the CME FedWatch Tool.
The lackluster GDP added further pressure to an already-tense market contending with concerns over a pullback in growth among technology earnings.
“For all of the attention given to generative AI in the past nine months, the failure of Meta to attain its revenue growth projections in Q1 is raising questions about whether the monetization of this technology is as easy as what traders were led to believe by management,” said ThierryWizman, global FX and rates strategist at Macquarie.
Meta’s report raises concern ahead of other big tech releases. Microsoft and Alphabet are slated to post earnings after the close Thursday.
Correction: An earlier version misstated the day’s move for the Nasdaq Composite.
4:11 p.m.: Stocks close lower, Dow slides more than 300 points
Stocks closed lower on Thursday, with gross domestic product data fueling growth concerns and pressuring equities.
The Dow Jones Industrial Average pulled back 375.12 points, or 0.98%, to close at 38,085.80. The S&P 500 slipped 0.46% to finish the session at 5,048.42, while the Nasdaq Composite lost 0.64% to 15,611.76.
— Brian Evans
3:30 p.m.: Investor bullishness below historical average for first time since early November
Individual investor bullishness toward the outlook for stock prices slid to 32.1% in the latest week, the lowest since early November, which was also the last time enthusiasm was below the historical average of 37.5%. That marked the end of 25 straight weeks when bullishness was above normal.
The weekly survey from the American Association of Individual Investors showed neutral sentiment regarding the next six months surged to 33.9% from 27.8%. The historical average is 31.5%.
Bearish opinion was little changed at 33.9% vs. 34.0% last week (and above an historical average of 31% for a second week).
— Scott Schnipper
3:01 p.m.: Federal Reserve is ‘boxed in a corner’ after GDP report, strategist says
The softer-than-expected GDP report puts the Fed in a bind with inflation readings heating up, said Mike Cornacchioli, Citizens Private Wealth senior VP for investment strategy.
“The GDP report was two-pronged: bad and ugly,” Cornacchioli said.
And while the GDP pricing data is just one way to look at inflation, the upward trendline is now becoming clear, Cornacchioli said.
“I think we’ve moved past seeing this uptick in inflation being transitory. It’s now a real concern, and continuing data is reinforcing that, which is what the PCE price data shows us. The Fed is kind of boxed in a corner here,” he added.
— Jesse Pound
2:34 p.m.: Stagflation fears are overblown, says BMO’s Yung-Yu Ma
Although GDP in the January-through-March period grew less than expected — while the inflation posted its biggest gain in a year — the economy is at little risk of falling into stagflation, according to BMO Wealth Management chief investment officer Yung-Yu Ma.
“We actually think growth is going to hold up pretty well,” Ma said. Much of the detractors of GDP growth were volatile one-time items, such as inventories, Ma noted, as well as underscoring strength in consumer and business spending.
“We see a pretty healthy and stable growth environment; we aren’t especially concerned about growth pulling back much throughout this year. We actually think there’s a good prospect for acceleration as we go throughout the year,” said Ma.
Ma forecasts prices for most services and goods to moderate in the remainder of 2024. “This GDP report might might actually mark a high point of worry for both inflation concerns and growth this year. We think both are going to turn the corner positive direction,” Ma said. “It might take a little bit of time, but we we don’t we don’t see these trends persisting throughout this year.”
With a forecast for a healthy growth environment, albeit a relatively neutral environment for inflation with regards to the Federal Reserve, Ma believes there is still a favorable backdrop for equities in 2024. “It’s not as favorable — but it’s still a backdrop that we wouldn’t recommend investors take an overly conservative or cautious stance in the face of this outlook,” Ma said.
— Hakyung Kim
1:30 p.m.: Tech investor stands by Meta Platforms, but says stock needs to ‘find support’
Technology investor Paul Meeks is standing by Meta Platforms despite Thursday’s sell-off, but said it’s too soon to snatch up shares just yet.
The stock needs to “find support for at least a few trading session, so I’m more confident that the short-term selling has been exhausted,” said the co-chief investment officer and portfolio manager at Harvest Portfolio Management.
Meeks considers himself a long-term owner of the stock, but said he’s waiting for more earnings reports to trickle in. This includes results from his favorite AI names Nvidia and Advanced Micro Devices.
— Samantha Subin
1:15 p.m.: Meta’s AI spending could benefit these stocks
Meta Platforms is down nearly 12% in midday training as investors react to the news that it will take a while to see the full benefits of the company’s rising investments in artificial intelligence. But one company’s loss could be another’s gain. As Meta’s spending could turn into bigger revenue at Super Micro, Arista Networks, Pure Storage, Broadcom and AMD, according to Wells Fargo.
Analyst Aaron Rakers estimates Meta was an approximately 10% customer for Super Micro in the fourth quarter of 2023, and for Pure Storage last year.
Arista Networks, which makes ethernet-based AI cables and other products, received about 21% of last year’s revenue from Meta, he said.
Rakers also said Meta has been using Broadcom’s custom networking chips and was one of the first customers for its new AI chip, the MI300X.
Chip stocks were trading higher on Thursday, against the broader market’s steep decline.
—Kristina Partsinevelos, Christina Cheddar Berk
12:41 p.m.: Check out the stocks making headlines in midday trading:
Victoria’s Secret— Shares dropped 3.5% after Goldman Sachs initiated coverage of the stock with a sell rating, saying it sees a “tough macro and ongoing competitive pressure” for the lingerie company in the near term. Longer term, the firm is constructive on the company’s loyalty initiatives and renewed merchandise focus.
Meta Platforms— The Facebook-parent company plunged more than 11%. Meta reported lighter-than-expected second-quarter revenue guidance on Wednesday, and CEO Mark Zuckerberg spoke about spending in areas such as AI and mixed reality that are not currently profitable.
Tech stocks — Shares of major tech giants dropped on Thursday as Meta’s lackluster revenue outlook led to declines across the sector. Microsoft and Alphabet shares dropped roughly 3% and 2%, respectively, ahead of their earnings due after the bell. Amazon’s stock price shed 2%.
Monster Beverage— JPMorgan downgraded Monster Beverage to neutral from overweight due to “cost pressure,” pushing shares roughly 3% lower.
12:40 p.m.: Developed markets are showing signs of pressure from escalating geopolitical tensions, falling expectations of rate cuts and a recent equity sell off.
During the period, U.S. equity funds saw their third outflow in five weeks.
— Hakyung Kim
12 p.m.: Thursday sell-off pulls Dow into negative territory on the week
Thursday’s drop yanked the Dow below its flatline for the week, underscoring the magnitude of the daily loss.
The blue-chip average tumbled more than 1.5% in late morning trading. It was now down about 0.4% on the week, despite pacing for a gain of more than 1% heading into the session.
With that decline, the Dow sat within 0.5% of its flatline for 2024.
While the S&P 500 and Nasdaq Composite also fell in Thursday’s session, both remained on track to end the week higher. The broad S&P 500 was poised to finish up by 0.8%, while the technology-heavy Nasdaq was heading toward a 1% gain.
— Alex Harring
11: 24 a.m.: Chipmaker ETFs are a rare bright spot for investors Thursday
Semiconductor ETFs are performing well on Thursday even as the broader market struggles.
The VanEck Semiconductor ETF (SMH) was up about 0.7% on the session, while the Invesco PHLX Semiconductor ETF (SOXQ) was up about 0.9%.
The iShares Semiconductor ETF (SOXX) added about 0.5%.Nvidia was helping to lead the group higher, rising more than 2%. The chip giant had a 10% sell-off of its own last week, but is starting to claw back those losses.
— Jesse Pound
10:46 a.m.: IBM and Caterpillar lead Dow lower
The Dow has dived almost 700 points in early Thursday trading, putting the blue-chip average on track for its worst day this year.
IBM and Caterpillar led the 30-stock index into the red, dropping more than 9% and 7%, respectively, on the back of earnings. Both missed analyst estimates for revenue in the quarter.
Big technology names Microsoft and Amazon were the next worst performers, shedding nearly 4% and 3%, respectively.
More than two out of every three Dow stocks traded down in the session. Merck, which reported better-than-anticipated earnings this morning, and UnitedHealth bucked the downtrend, with each up more than 1% in the session
— Alex Harring
10:22 a.m.: Meta shares on pace for worst day since October 2022
Meta Platforms shares plummeted 11.34% on Thursday. The losses put the stock on pace for its worst day since October 27, 2022, when Meta declined 24.56%.
Shares fell after Meta issued weak revenue guidance that overshadowed its better-than-expected earnings in the first quarter. The sell-off intensified following CEO Mark Zuckerberg’s comments on the company’s long-term investments in artificial intelligence and the metaverse.
— Hakyung Kim
10:04 a.m.: New York Stock Exchange decliners lead advancers 10-1
About 10 stocks traded lower at the New York Stock Exchange on Thursday for every one advancer, as the latest GDP report and new tech earnings dampened investor sentiment. Overall, 2,386 NYSE-listed stocks fell, while 210 advanced.
— Fred Imbert
9:52 a.m.: The U.S. GDP report was the ‘worst of both worlds,’ investor says
A disappointing U.S. GDP print could spell trouble ahead for the equity market if inflation continues to prove sticky, one investor said.
“This report was the worst of both worlds: economic growth is slowing and inflationary pressures are persisting,” wrote Chris Zaccarelli, investment chief at Independent Advisor Alliance.
“The Fed wants to see inflation start coming down in a persistent manner, but the market wants to see economic growth and corporate profits increasing, so if neither are headed in the right direction then that’s going to be bad news for markets,” he continued.
The data also raises the stakes for the personal consumption expenditures report that is set to release Friday. Investors are hoping the PCE report, which is the Fed’s preferred measure of inflation, will show an improvement in pricing pressures after the March consumer inflation report came in hotter than expected.
— Sarah Min
9:33 a.m.: Stocks fall after GDP data shows slowing economic growth
Stocks opened lower on Thursday, with equities selling off after fresh gross domestic product data signaled signs of slowing economic growth.
The Dow Jones Industrial Average pulled back 500 points, or 1.3%. The S&P 500 pulled back 1.4%, while the Nasdaq Composite lost 2.3%.
— Brian Evans
8:58 a.m.: 10-year Treasury yield jumps to highest level since November
The global private credit market has solidified its role as a fundamental pillar of enterprise finance, expanding rapidly across middle-market lending, asset-backed finance, and infrastructure financing. As non-bank financial institutions capture a larger share of corporate debt origination, global regulatory bodies are increasing oversight to evaluate market transparency and systemic risk interconnections.
Growth Drivers in Direct Lending
Direct lending platforms have continued to attract substantial institutional allocations from pension funds, sovereign wealth entities, and insurance companies seeking attractive risk-adjusted yields. Private debt funds offer corporate borrowers customized financing structures, faster execution timelines, and confidentiality compared to syndicated loan markets.
In 2026, private credit managers are increasingly financing larger corporate transactions, providing multi-billion-dollar credit facilities for buyout deals and corporate restructurings. The flexibility of private debt contracts—featuring unitranche pricing and tailored covenant packages—has made direct lending the preferred capital source for middle-market enterprise sponsors.
Regulatory Scrutiny and Systemic Risk Assessment
The rapid growth of non-bank intermediation has drawn heightened scrutiny from financial regulators in North America and Europe. Because private debt agreements are negotiated privately without public exchange disclosures, central banks are evaluating potential vulnerabilities related to asset valuation consistency and fund liquidity profiles.
Regulatory agencies are introducing guidelines aimed at improving reporting standards for private investment vehicles managing institutional assets. Key focus areas include monitoring leverage ratios within private credit funds and evaluating indirect credit exposures between commercial banking institutions and private debt funds.
Navigating Elevated Refinancing Costs
With benchmark interest rates remaining elevated, private debt borrowers face higher debt service obligations on floating-rate credit facilities. Financial advisory firms report an increase in proactive liability management strategies, including payment-in-kind (PIK) interest options, equity infusions from sponsors, and covenant modifications.
Private credit managers with deep operational capabilities are actively working alongside portfolio companies to optimize working capital and maintain cash flow coverage ratios during periods of higher borrowing costs.
Key Financial Takeaways
1. Mainstream Asset Class: Private credit has expanded beyond niche alternative asset status into a core corporate finance solution.
2. Enhanced Transparency Standards: Regulatory frameworks are evolving toward greater disclosure requirements for private debt managers.
3. Proactive Risk Management: Lenders and sponsors must prioritize debt sustainability and active portfolio monitoring amid high benchmark rates.
The global venture capital (VC) ecosystem is operating under a disciplined investment framework in 2026. Following years of valuation adjustments and shifting liquidity environments, venture capital firms and private equity investors are prioritizing proven unit economics, positive cash flow pathways, and capital efficiency over rapid, unconstrained user acquisition.
The Shift Toward Disciplined Startup Valuations
Early-stage and growth-stage startup valuations have stabilized at sustainable historical averages. Venture capital partners are conducting rigorous due diligence processes before deploying capital, scrutinizing gross margins, customer acquisition costs (CAC), net revenue retention (NRR), and lifetime value (LTV) metrics.
While total capital deployed remains robust, seed and Series A funding rounds are taking longer to finalize. Founders are expected to demonstrate clear product-market fit and defensible intellectual property rather than relying on top-line revenue projections unsupported by strong underlying economics.
M&A Activity and Liquidity Solutions
The market for venture-backed exits is seeing renewed momentum through strategic mergers and acquisitions (M&A) and secondary market liquidity facilities. Established corporate enterprises are acquiring high-performing technology startups to integrate proprietary artificial intelligence models and specialized software solutions into their product ecosystems.
Simultaneously, secondary market transactions have become an essential liquidity mechanism for early employees and institutional investors. Specialized secondary funds are purchasing pre-IPO shares at discounted valuations, providing liquidity opportunities while companies remain private for longer durations.
Sector Allocation: Deep Tech, Clean Energy, and Enterprise Automation
Venture capital investment is heavily concentrated in deep technology and capital-intensive engineering sectors. High-growth investment themes include:
– Next-Generation Semiconductors: Hardware startups designing specialized AI processors and energy-efficient microchip architectures.
– Clean Technology: Battery chemistry innovations, carbon capture solutions, and grid-scale energy storage startups.
– Enterprise Process Automation: Software platforms that automate complex workflows in healthcare, financial services, and industrial logistics.
Key Insights for Entrepreneurs and Investors
1. Prioritize Capital Efficiency: Startups focused on achieving operational profitability receive higher valuation premiums from institutional investors.
2. Strategic Exit Planning: Corporate M&A is serving as a primary exit route for venture-backed startups navigating prolonged IPO windows.
3. Focus on High-Moat Technologies: Deep tech and proprietary software architectures are securing the majority of growth-stage capital allocations.
The infrastructure supporting global commerce is undergoing a major technological upgrade as real-time digital payment rails, cross-border settlement solutions, and Central Bank Digital Currency (CBDC) pilot programs achieve widespread commercial adoption. Financial institutions and fintech developers are reimagining payment processing to eliminate friction, lower transaction fees, and accelerate settlement speed.
Transforming Cross-Border Settlement Infrastructure
For decades, international corporate payments relied on legacy correspondent banking networks characterized by multi-day settlement delays, opaque fee structures, and high foreign exchange markups. In 2026, modern cross-border payment networks are enabling near-instantaneous settlement for international trade transactions.
Financial technology platforms are leveraging distributed ledger technology and real-time gross settlement (RTGS) interconnections to settle transactions in seconds. International trade participants benefit from reduced working capital requirements and minimized foreign exchange volatility risks during cross-border transfers.
Commercial Expansion of Central Bank Digital Currencies
Central banks representing major global economies are advancing CBDC initiatives from research phases into active commercial deployment. Wholesale CBDCs—designed specifically for interbank settlement and financial institution clearing—are demonstrating substantial efficiency gains in domestic and international transactions.
At the retail level, several nations have introduced public digital currency options alongside existing commercial banking networks. These sovereign digital payment channels aim to expand financial inclusion, lower consumer transaction fees, and improve the efficiency of government-to-citizen financial disbursements.
Open Banking and Embedded Finance Ecosystems
Alongside settlement infrastructure upgrades, open banking regulations and embedded finance frameworks are transforming merchant-consumer interactions. Commercial businesses across retail, travel, and business-to-business (B2B) services are integrating seamless payment APIs directly into their customer software interfaces.
Through open banking frameworks, consumers can initiate secure bank-to-bank payments without relying on traditional credit card networks, significantly reducing merchant processing fees. Integrated Buy-Now-Pay-Later (BNPL) options and point-of-sale credit facilities continue to expand, driving higher conversion rates for digital commerce platforms.
Strategic Financial Takeaways
1. Treasury Optimization: Corporate treasurers should leverage instant cross-border payment platforms to minimize liquidity buffers and foreign exchange exposure.
2. CBDC Integration: Financial institutions must prepare internal core banking systems to interface with emerging wholesale CBDC payment rails.
3. Merchant Fee Reduction: Enterprise merchants can lower payment processing overhead by adopting account-to-account (A2A) open banking checkout solutions.
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