The Economy Grew at a Slower Pace as Spending and Inflation Decreased – US Market Wrap

Wall Street traders sold stocks and bought bonds after the latest round of economic data indicated a slowing in momentum.

Just 24 hours before the release of the Federal Reserve’s preferred price gauge, a report showed that the United States grew at a slower pace, with both spending and inflation falling. Economic cooling could strengthen the case for the Fed to begin lowering interest rates this year. However, this could imply weaker consumption, which would be a source of concern for Corporate America.

The S&P 500 fell to around 5,235. The Nasdaq 100 dropped 1%. US officials have slowed the issuance of licences to chipmakers such as Nvidia and Advanced Micro Devices for large-scale AI accelerator shipments to the Middle East, according to people familiar with the situation. Salesforce Inc. fell 20% after a downbeat forecast.

Treasury two-year yields fell five basis points, to 4.92%. The dollar fell.