Wall Street experiences a Salesforce outage.
Wall Street undergoes more losses following tax day. Salesforce, a competitor of SAP, shares disappointing predictions, leading other stock market players to experience pressure.
The slowdown in the US economy and the drop in Salesforce's stock value are causing problems for Wall Street. The Dow Jones Industrial Average, marked at 38,111 points, saw a 0.9% decrease on Thursday. The Nasdaq suffered a 1.1% loss, ending at 16,737 points. The S&P 500 also closed 0.6% down at 5,235 points.
The United States' economic growth has moderated with a Gross Domestic Product (GDP) increase of 1.3% from January to March, measured annually. This is the slowest rate of growth since the second quarter of 2022, when the economy technically contracted. Peter Cardillo, the chief economist of Spartan Capital Securities, remains cool: "Moderate economic growth isn't that bad, as we're still in a growth phase." The anticipated revision of the Personal Consumption Expenditures (PCE) Index, which is a major inflation indicator for the US Federal Reserve, could also contribute positively to the financial market.
Salesforce tanks
The collapse of Salesforce's stock had a significant impact on the major US indices' losses. The stock plummeted by around 20% due to the disappointing outlook it presented. The company predicted their second-quarter revenue would fall within the range of $9.2 billion and $9.25 billion. Analysts had initially anticipated $9.37 billion. Given the high inflation and strict monetary policies, it seems that customers have chosen to postpone software investments.
On a more positive note, the shares of Birkenstock, which listed on the New York Stock Exchange in October, surged by nearly 12%. The German traditional brand upgraded its full-year forecast owing to strong demand for its cork sandals and new closed shoes.
Tesla's stock gained 1.5% due to a report suggesting the company would launch an innovative self-driving software in China. Investors have been speculating that Tesla would offer this software to users through a monthly subscription.
PCE figures could shed light on monetary policy
Investors are eagerly awaiting the release of the PCE figures for April on Friday. This index incorporates a basket of consumer goods. In March, it jumped by 2.7% on an annualized basis. If no change or a stagnation is observed in April, it might indicate that the Federal Reserve may be reluctant to up interest rates, as per some analysts. Despite this, Powell's most recent statements failed to offer comfort to investors. "I'm not seeing any urgency to lower rates 'in the near future'," said John Williams, the head of the New York Fed, during a gathering of the Economic Club of New York on Thursday.
Reports indicate that OPEC+ is mulling over extending their existing production cuts in response to a hike in supply and weakened demand. The consortium of oil-exporting nations is purportedly working on a deal that permits some of the current measures to continue until 2025. This agreement needs approval at the OPEC+ meeting on Sunday.
Transition: To stay updated on today's stock market developments, click here.
Read also:
The disappointing predictions from Salesforce, a major player on Wall Street, led to pressure on other share trading companies, impacting the Dow Jones. The Dow Jones, with a current standing of 38,111 points, witnessed a 0.9% decrease due to these share price fluctuations.
Following Salesforce's tanking stock, share trading in the tech sector on Wall Street experienced a significant downturn, with the Dow Jones and other major indices recording losses.
