The SPDR S&P 500 ETF Trust traded higher by 2.1 percent on Thursday after the Commerce Department said U.S. GDP declined 1.4 percent in the first quarter.
What Happened
U.S. GDP declined 1.4 percent in the first quarter, falling well short of consensus economist estimates of 1 percent growth.
Investors initially reacted positively to the news ahead of a critical Federal Reserve interest rate decision next week.
The first-quarter drop marked a sharp contraction from the 6.9 percent GDP growth the Commerce Department reported in the fourth quarter of 2021.
Underneath the disappointing headline number, consumer spending during the first quarter was actually up 2.7 percent. Unfortunately, the overall GDP number was weighed down by an 8.5 percent decline in defense spending during the quarter. The U.S. trade deficit in goods also expanded to a record high in the quarter, which also heavily weighed on GDP growth.
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