The U.S. economy contracted by 0.3% in Q1 2025, surprising economists who expected growth. This sharp decline, the steepest since 2022, raises recession fears and impacts stock markets dramatically, particularly the Dow Jones Industrial Average which experienced a significant drop. All economic sectors are suffering, especially consumer discretionary and energy stocks. Despite some companies like Seagate Technology reporting positive earnings, the overall market sentiment is cautious, leading to further concerns about the effects of tariffs and economic policy on growth.
The economic slowdown is now a reality after the U.S. economy shrunk by 0.3% during Q1 2025, marking the steepest decline since the pandemic.
Recession fears triggered a 600-point drop in the Dow Jones Industrial Average, impacting all sectors, especially consumer discretionary stocks.
Despite being up 2% over the last five days, the S&P 500 is down 6.7% year-to-date, reflecting unstable market sentiments.
Market reactions indicate a shift as sectors like consumer discretionary and energy are drastically falling while companies like Seagate Technology experience surprising gains.
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