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U.S. Stocks Rally Despite 0.3% GDP Decline, Tech Earnings Boost Sentiment

Coin WorldThursday, May 1, 2025 7:08 am ET
1min read

U.S. stocks have demonstrated resilience in the face of a disappointing GDP report, with retail investors capitalizing on the market dip to buy into the market. The advance estimate of U.S. real GDP showed a 0.3% quarter-on-quarter decrease in the first quarter, on an annual rate, which was weaker than the consensus forecast of +0.2% and a reversal from the 2.4% growth in the previous quarter. Despite this contraction, buying momentum has continued in stock markets, with S&P futures priced up this morning.

The market's reaction to the GDP report has been met with caution from some experts. A market expert has warned investors to ignore the 'generational buy' hype during this period of historic market volatility, suggesting that 'buying the dip' could be a significant mistake. This sentiment is echoed by the fact that there were two inflation reports today, one of which accompanied the GDP report and was described as warm, indicating that inflation remains a concern.

Ask Aime: "Should I buy stocks now, or wait for the market's reaction to the GDP report?"

Traders have largely ignored the shrinking GDP and have instead focused on the market reversal, with Wall Street rallying earlier in the day. This confidence was not present at the start of the session, which began on a messy note. The rally was driven by strong earnings reports from major tech companies, with microsoft and meta blowing past estimates.

The economic contraction has raised concerns among many Americans about the state of the economy. However, there are steps that individuals can take to future-proof their finances during this period of uncertainty. Retail investors, in particular, have been active in buying the current dip, focusing on single stocks rather than the broader market.

The market's reaction to the GDP report highlights the complex interplay between economic data and investor sentiment. While the GDP contraction is a cause for concern, the market's resilience suggests that investors are focusing on other factors, such as strong earnings reports and the potential for further market gains. However, the cautionary words from market experts serve as a reminder that the current market environment is volatile, and investors should proceed with caution.

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Competitive-Ad4561
05/01
$META $600 today
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Anteater_Able
05/01
$META rising lows
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Pushover112233
05/01
@Anteater_Able How long you holding $META? Thinking of going long myself, curious about others' strategies.
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Smart-Material-4832
05/01
Retail investors buying dips, focusing on single stocks. Diversification still key, don't put all eggs in one basket.
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FirmMarket4692
05/01
GDP drop, but my portfolio's smiling 😊
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Elichotine
05/01
Strong earnings trump GDP news, go figure.
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BenGrahamButler
05/01
Tech earnings are the real MVPs today
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Sorry-Palpitation-70
05/01
Buying the dip feels like a gamble, no?
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meowmeowmrcow
05/01
Investors gotta stay cautious, volatility is real. Not every dip is a buy opportunity, do your DD.
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Minimac1029
05/01
@meowmeowmrcow Agreed, volatility's a thing.
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psycho_psymantics
05/01
@meowmeowmrcow True, DYOR, market's wild.
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AGailJones
05/01
Tech earnings are the real MVPs today, ignoring GDP noise and focusing on growth 🚀
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Terrible_Onions
05/01
META's earnings beat is a game-changer. Its ad revenue is a lifeline in this economic storm.
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Tiger_bomb_241
05/01
Strong earnings from $MSFT and $META show innovation still driving, don't sleep on tech.
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GlobalEvent6172
05/01
Wow!The META stock generated the signal, from which I have benefited significantly!
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