Dow drops more than 600 points on inflation and growth concerns, heads for biggest drop of the year: Live updates

cnbc.com:

Stocks tumbled Thursday after the latest U.S. economic data showed a sharp slowdown in growth and pointed to persistent inflation.

The Dow Jones Industrial Average slid 611 points, or 1.6%, weighed down by steep declines in Caterpillar and IBM. The S&P 500 dropped 1.3%, and the Nasdaq Composite lost 1.7%.

U.S. gross domestic product expanded 1.6% in the first quarter, the Bureau of Economic Analysis said. Economists polled by Dow Jones forecast GDP growth would come in at 2.4%.

Along with the downbeat growth rate for the quarter, the report showed consumer prices increased at a 3.4% pace, well above the previous quarter's 1.8% advance. This raised concern over persistent inflation and put into question whether the Federal Reserve will be able to cut rates anytime soon.

«In the short term, the numbers don't appear to be a green light for either bulls or bears...the uncertainty is unlikely to ease pressures in a market experiencing its deepest pullback since last year,» said Chris Larkin, managing director of trading and investing at E*Trade from Morgan Stanley.

Following the GDP print, traders moved down expectations for an easing of Federal Reserve monetary policy. Fed funds futures trading data suggests there will be just one interest rate cut this year, according to the CME FedWatch Tool

The lackluster GDP added further pressure to an already-tense market contending with concerns over a pullback in growth among technology earnings.

Meta plunged 13% after the social media giant issued light revenue guidance for the second quarter. That would be the stock's biggest one-day decline since October 2022. International Business Machines also fell 8% after missing consensus estimates for first-quarter revenue.

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