From Yahoo Finance: 2025-04-30 13:53:00

Investors received mixed signals on the US economy as the GDP report showed a 0.3% contraction in the first quarter due to tariffs. Imports surged at a 41.3% rate, impacting GDP negatively. The uncertainty from Trump’s tariffs and trade war keeps markets on edge, with a potential recession still looming.

Despite the GDP contraction, some economists are encouraged by the data. Consumer spending grew at a 1.8% rate, indicating the domestic economy is still on track. However, the uncertainty surrounding tariffs poses risks to markets, complicating the situation for the Federal Reserve.

Stocks initially fell after the GDP report but rebounded later in the session, with the S&P 500 ending the day with a slim gain. Two-year Treasury yields declined, while longer-dated yields were flat or higher. Investors are positioning for various outcomes amid the uncertainty.

The lack of clarity on tariffs is leading investors to adopt a “barbell” approach to portfolios, balancing defensive, low-volatility stocks with high-momentum, growth equities. The upcoming US employment report on Friday will provide another view of the economy, crucial for understanding the impact of tariffs and consumption on future economic growth.



Read more at Yahoo Finance: Muddied GDP report leaves investors with little clarity about economic risk