The Zhitong Finance App learned that on Thursday, the three major indices fell, and the market was shocked by the data that US economic growth was slower than expected and inflation continued. The initial quarterly real GDP annualized rate for the first quarter of the US recorded 1.6%, the lowest since Q1 2023. The initial annualized quarterly rate of the US core PCE price index for the first quarter recorded 3.7%, a new high since Q2 2023, and rebounded sharply from the previous month.

US Treasury yields climbed on Thursday. The 10-year Treasury yield rose 6.7 basis points to 4.721%, reaching a high of 4.739%. The yield on 2-year treasury bonds once broke through the 5% mark, reaching a maximum of 5.027%.

[US Stocks] At the close, the Dow fell 375.26 points, or 0.98%, to 38085.66 points; the NASDAQ fell 100.99 points, or 0.64%, to 15611.76 points; the S&P 500 index fell 23.19 points, or 0.46%, to 5048.44 points. Alphabet (GOOG.US) once rose 15% after the market. If this increase continues until the opening of the 26th, the market value will increase by nearly 300 billion US dollars, announcing dividends for the first time and repurchasing up to 70 billion US dollars of shares; Microsoft (MSFT.US)'s total revenue and cloud business revenue both exceeded expectations, rising 5% after the market, corresponding to a potential increase of 150 billion US dollars in market value.

[European stocks] Most major indices of European stocks fell. The German DAX30 index fell 0.95%, the French CAC40 index fell 0.93%, the European Stoxx 50 index fell more than 1%, and the British FTSE 100 index rose 0.48%.

[Asia Pacific Stock Market] The Nikkei 225 Index fell more than 2%, Indonesia's Jakarta Composite Index fell 0.22%, Vietnam's VN30 Index rose 0.13%, and the Singapore Straits Times Index fell 0.16%.

[Cryptocurrency] Bitcoin rose 0.89% to $64828.2 per unit; Ethereum rose 1.31% to $3180.32 per unit.

[Gold] COMEX gold futures rose 0.27% to $2344.60 per ounce; COMEX silver futures reported $27.465.

[Crude oil] US WTI crude oil futures closed higher on Thursday. US GDP for the first quarter showed that inflation was heating up and the economy was slowing down, causing investors to worry that the outlook for crude oil demand might weaken. West Texas Intermediate (WTI) futures for June delivery on the New York Mercantile Exchange rose 76 cents, or 0.92%, to close at $83.57 a barrel.

[Metals] London Metals generally rose, with Lun Aluminum down 0.92%; Lun Copper up more than 1.3%, Lunzn Zinc up 1.7%, and Lunn Nickel up 1.3%.

[Macro News]

The US economy cools down, and the labor market slows or relieves inflationary pressure. The initial annualized quarterly rate of real GDP in the first quarter of the US recorded 1.6%, lower than economists' expectations. Prior to that, a series of data from recent weeks showed that the US economy maintained strong growth. Continued economic growth has created continued price pressure, which increases the possibility that inflation may stabilize around 3% rather than the Fed's 2% target. Meanwhile, investors' expectations of interest rate cuts have been disrupted. However, the signs are once again showing that the economy is cooling down. Low-income Americans are saving far less than they were before the pandemic. Mortgage interest rates recently rebounded above 7%, leading to the biggest monthly decline in housing sales in more than a year in March. The average hourly wage growth rate in March was the lowest since June 2021. Many economists still believe that if the labor market slows down, these phenomena will expand, thereby slowing inflation.

Second-hand housing contracts in the US jumped to the highest level in a year in March. Despite high borrowing costs and insufficient supply, the number of second-hand housing contracts in the US reached the highest level in a year in March. The National Association of Realtors (NAR)'s index of second-hand housing contracts climbed 3.4% to 78.2. Although the second-hand housing contract volume index reached a high point, “the index has remained within a fairly narrow range over the past 12 months, with no significant breakthroughs,” NAR chief economist Lawrence Yun said in a statement. “A significant increase will only occur if mortgage interest rates fall and inventories increase.” Recently, second-hand sales have lagged behind new home sales because US homebuilders have lowered customer interest rates or offered other preferential terms to facilitate the deal. Meanwhile, supply in the second-hand housing market is far below pre-pandemic levels. Many people in the second-hand housing industry are desperate for the Federal Reserve to cut interest rates. Last week, Yun accused the market of still “stagnating” due to interest rates. According to data from the American Mortgage Bankers Association, contract interest rates for 30-year fixed-rate mortgages rose 11 basis points to 7.24% in the week ending April 19, the highest level in five months.

Federal Reserve Goulsby said in an interview last week that the Federal Reserve needs to “recalibrate” its policy. Chicago Federal Reserve Governor Austan Goolsbee (Austan Goolsbee) said in an interview last week that the Federal Reserve must “recalibrate” its policy after a series of higher-than-expected inflation data was released. “As I've always said, one month doesn't mean anything, but now it's been like three months in a row, at least one month is true,” Goolsbee said. “The inflation rate showed a very clear improvement in six or seven months and is close to the 2% target, but now the data we are seeing is much higher than the target value, so we have to readjust our policies and stop and see the situation.”

Federal Reserve microphone: Three degrees of inflation is stronger than expected, and the dream of cutting interest rates is getting farther and farther away. “Federal Reserve microphone” Nick Timiraos's latest article pointed out that Thursday's economic activity report sounded the latest wake-up call for investors and Fed policymakers. They have been holding their breath and are hoping that falling inflation will allow interest rate cuts to officially begin this summer. The data shows that after cooling off perfectly in the second half of last year, US inflation has been more stubborn than expected for the third month in a row. So far this year, individual economic growth and price data alone are not enough to significantly change the Fed's outlook. But the cumulative impact of these continuously disappointing data is significant. In particular, the inflation data has always been stronger than expected. In follow-up reports in recent months, the revision of the inflation data has increased. This trend has prompted investors and Federal Reserve officials to reconsider whether it is appropriate to cut interest rates this year.

Yellen: It is possible to reduce inflation without harming employment. US Treasury Secretary Yellen said that the country's inflation rate can be reduced without weakening the historically strong job market. “I don't think there's any reason why the unemployment rate needs to rise to lower the level of inflation,” Yellen said. She said there was no evidence that the labor market was so hot that wage pressure was a source of inflation. She assessed the employment data as “consistent” with the continuing downward trend in inflation. Thursday's data showed a slowdown in US economic growth. Yellen downplayed the report, saying “abnormal” factors had dampened growth. The economy continues to run at full speed, she said.

[Individual Stock News]

Microsoft's (MSFT.US) cloud business is growing at an accelerated pace, driven by AI. Microsoft released third-fiscal quarter results that surpassed Wall Street expectations. The company's stock price rose more than 5% after the market on Thursday. A Microsoft statement said that in the third fiscal quarter ending March 31, the company's total revenue increased 17% year over year. Net profit was $21.94 billion, and EPS was $2.94, up from $18.3 billion and $2.45 in the same period last year. The company's smart cloud division generated revenue of $26.71 billion, an increase of around 21%, exceeding analysts' forecasts of $26.26 billion. Revenue from Azure and other cloud services grew 31%, compared to a 30% increase in the previous quarter. Of Azure's growth, 7 percentage points were related to artificial intelligence, up from 6 percentage points in the previous quarter.

For the first time, Google announced dividend payments and approval of an additional $70 billion repurchase. Google's parent company Alphabet (GOOG.O) rose 15% in after-hours trading on Thursday. Previously, the company reported quarterly revenue and net profit exceeding expectations, and announced a cash dividend of $0.20 per share, which made investors very excited. The board also approved a share repurchase plan of up to $70 billion. CEO Sundar Pichai said in a statement. Our first-quarter results reflect strong performance for search, YouTube, and cloud services.

Toyota (TM.US) will invest 1.4 billion US dollars in the Indiana plant in the US. Toyota Motor Corporation said on Thursday that it will invest 1.4 billion US dollars at its Princeton, Indiana plant to assemble a three-row battery electric SUV. This brought Toyota's total investment in Indiana to $8 billion. In addition to producing new cars, the plant will add a new battery assembly line for lithium-ion batteries, provided by the automaker's battery manufacturing plant in North Carolina. Earlier in the day, Toyota said that in the year ending March 31, its global sales and production reached record highs, thanks to strong demand and no semiconductor supply restrictions in recent years.