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U.S. economy shrunk 0.3% in the first quarter as Trump policy uncertainty weighed on businesses

1. U.S. GDP fell 0.3% in Q1 2025, indicating economic contraction. 2. A surge in imports signaled preemptive actions against new tariffs. 3. Consumer spending growth slowed to 1.8%, the lowest since Q2 2023. 4. Private domestic investment, however, surged 21.9%, showing resilience. 5. Markets reacted negatively, with futures slipping post-report.

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FAQ

Why Bearish?

GDP contraction and recession fears generally depress market sentiment; historical examples show similar patterns in previous downturns affecting S&P 500 negatively.

How important is it?

The contraction of GDP directly relates to economic health, thus impacting investor confidence and S&P 500 valuations.

Why Short Term?

Immediate market reactions suggest a quick reflection of economic trends on S&P 500, similar to past GDP miss scenarios.

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