U.S. stock indexes fell on Thursday weighed down by gloomy forecasts from Meta and Qualcomm, while an early reading showed the U.S. economy contracted again in the second quarter adding to fears the economy was already in recession.
Fears of runaway inflation and aggressive monetary policy tightening biting into economic growth have spooked markets, after gross domestic product fell at a 0.9% annualized rate last quarter, the Commerce Department said in its advance GDP estimate.
A Reuters survey of economists showed GDP growth likely rebounded at a 0.5% annualized rate last quarter."Today's reading only adds fuel to the fire that we are in or entering a recession," said Mike Loewengart, managing director at E*Trade from Morgan Stanley. "While it is certainly on the negative side of estimates, keep in mind that a 1% decrease is relatively small and supports the idea that any recessionary environment will be mild."
Two consecutive quarters of declines in growth are traditionally considered a recession, but the private research group that is the official arbiter of U.S. recessions looks at a broad range of indicators instead, including jobs and spending.
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