US stocks end mostly up, rebounding from bad GDP report

Stocks trader Anthony Matesic works on the floor at the New York Stock Exchange in New York. (AP Photo/Seth Wenig)

NEW YORK, United States — Wall Street stocks finished mostly higher Wednesday after digesting a poor US GDP reading that was offset by solid consumer spending data.

Markets opened sharply lower after government data showed the US economy shrank by an annual rate of 0.3 percent in the first quarter. 

This amplified worries about a recession amid President Donald Trump’s fast-changing tariff policies.

But equity markets moved gradually higher throughout the day. They rose after mid-morning data showed personal spending in March actually topped earlier estimates.

A late day surge lifted two of the three indices into positive territory.

The Dow Jones Industrial Average finished at 40,669.36, up 0.4 percent and more than 920 points above its session lows.

The broad-based S&P 500 advanced 0.2 percent to 5,569.06, while the tech-rich Nasdaq Composite Index declined 0.1 percent to 17,446.34.

Consumers “despite what they’re saying they still seem to be spending,” said Jack Ablin of Cresset Capital. He was alluding to survey data showing weak consumer sentiment.

READ: US economy unexpectedly shrinks on import surge before Trump tariffs

Part of the contraction in GDP was due to a surge in imports. This was from businesses seeking to get ahead of Trump’s myriad tariffs.

Job market slowed down

Besides the GDP data, payroll firm ADP reported that private sector employment grew by 62,000 in April. This was a sharp slowdown from a revised 147,000 in March.

Ablin said Friday’s jobs data for April will be “one of the most important jobs reports we’ve seen for a while” in light of uncertainty about the economy.

Among companies reporting results, Starbucks shares fell 5.7 percent. This was after the coffee giant reported a 50-percent fall in profits to $384.2 million.

But travel tech company Booking Holdings rose 3.9 percent as it reported higher quarterly revenues. This was despite the firm pointing to “uncertainty around the near-term geopolitical and macroeconomic environment.”