Consumer spending is decreasing, leading to a surprising 0.3% contraction in U.S. GDP for Q1 2025, disrupting expectations of growth. The S&P 500 may reverse its recent gains as the economic slowdown weighs on markets. Companies like Booking Holdings reported strong earnings, beating forecasts, while Caterpillar fell short, highlighting mixed corporate performance amid the economic backdrop. These developments illustrate the volatile relationship between consumer behavior and corporate earnings, as analysts adjust their forecasts in response to the economic climate.
Stock markets look likely to open lower, potentially interrupting a streak of gains, as the U.S. GDP fell 0.3% in Q1, contrary to expectations.
Consumer spending has decelerated from 4% in Q4 2024 to just 1.8% in Q1 2025, contributing to the overall negative GDP growth.
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