Stocks Rebound Amid Mixed Economic Data and Trade Concerns

The stock market witnessed a recovery after initial declines, with both the S&P 500 and the Dow Jones Industrial Average bouncing back, while the Nasdaq Composite experienced a minor setback. Reports from the Commerce Department revealed a contraction in the economy by 0.3% for the first quarter, a significant decline from the 2.4% growth noted in the previous quarter.

Economists expressed dissatisfaction with the negative GDP data, as it suggests challenges for company profits. Analysts pointed out that the latest GDP figure fell short of expectations, with projections indicating a growth rate of 0.8%. This current GDP reading marks the lowest since early 2022, raising concerns among investors.

Despite these negative indicators, some economists warned that the GDP report might not fully capture the true economic situation. They attributed part of the decline to a significant increase in imports as businesses aimed to prepare for impending tariffs. Furthermore, it was noted that the GDP figures might be adjusted upon further review, particularly due to the fluctuating trade policies established during the Trump administration.

The day saw a shift in sentiment with inflation data showing a decrease to 2.3% in March, bringing some optimism to the market. Nonetheless, the stock market has been volatile lately, influenced by concerns over the economic impacts of President Trump's policies. Trump, in a social media post, attributed current stock performance issues to President Biden, asserting that an economic boom was forthcoming due to tariffs and increased domestic business activity.

Looking ahead, investors are awaiting crucial employment data scheduled for release by the Labor Department, with forecasts predicting an addition of 135,000 jobs in April—lower than the previous month. An ADP report indicated a slowdown in hiring, with private sector job creation significantly declining compared to earlier figures.

Although corporate profits have remained robust, there is a prevailing uncertainty regarding how the ongoing economic fluctuations will affect consumer spending and business investment. Analysts caution that while the current earnings season has defied expectations, the implications of Trump's trade policies are yet to fully manifest, which may introduce further risks to the market.