Stocks tumbled on Thursday, dragged down by growth stocks after dour quarterly results from Meta Platforms, while signs of persistent inflation dampened hopes of the Federal Reserve cutting interest rates anytime soon.
The Dow Jones Industrial Average slid 680 points, or 1.8%, at 37,780.
The S&P 500 dropped 1.4%, and the Nasdaq fell 1.7%.
Meta plunged 14.7% after the Facebook-parent forecast higher expenses and lighter-than-expected revenue.
Social media firms such as Snap and Pinterest fell 4.2% and 4.9%, respectively.
Other growth stocks also came under pressure, with Alphabet, Amazon and Microsoft down between 4.3% and 4.5%.
Alphabet, Microsoft and Intel are scheduled to report their quarterly numbers on Thursday after markets close.
Adding to losses, US economic growth slowed more than expected in the first quarter, but an acceleration in inflation suggested that the Fed would not cut interest rates before September.
“The economy continues to grow, but at a slower pace and you still have sticky inflation, that just means that the Fed is not likely to cut in June and a big question mark for the remainder of the year,” said Peter Cardillo, chief market economist at Spartan Capital Securities.
Separately, the number of Americans filing new claims for unemployment benefits unexpectedly fell last week, pointing to still tight labor market conditions.
Yield on the 10-year Treasury note rose to multi-month highs after the data, last standing at 4.731%.
The data comes in ahead of the Personal Consumption expenditures (PCE) index, the Fed’s preferred inflation gauge, on Friday.
Money markets are pricing in just about 36 basis points of rate cuts from the Fed this year, down from about 150 bps seen at the start of the year, according to LSEG data.
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Downbeat results from other companies also weighed on equities.
International Business Machines dropped 7.9% after the firm said it will buy HashiCorp in a deal valued at $6.4 billion, and as its first-quarter revenue missed estimates.
Southwest Airlines slid 9.6% after slashing its estimates for new aircraft deliveries from Boeing in 2024 for the third time, saying it plans to undertake cost-cutting measures to ease the resultant blow.
Caterpillar lost 7.8% after the company said it expects sales to fall in the second quarter as demand for its construction equipment eases from last year’s boom.
On the bright side, Royal Caribbean Group edged 0.4% higher after the cruise operator raised its annual profit forecast for a second time.