Stock Prices Drop After New Data Shows GDP Shrank Since Start Of Year

Stock prices tumbled on Wednesday after a new report showed that the U.S. economy shrank in the first quarter of 2025.

The Dow Jones Industrial Average fell 0.8%, while The S&P 500 dropped 1.1%. The tech-heavy Nasdaq Composite fell 1.5%, according to CNBC. The drop in value followed a report from the Commerce Department that showed the U.S. GDP shrank 0.3% in the first three months of the year.

“This is Biden’s Stock Market, not Trump’s. I didn’t take over until January 20th. Tariffs will soon start kicking in, and companies are starting to move into the USA in record numbers,” President Donald Trump posted on Truth Social on Wednesday morning. “Our Country will boom, but we have to get rid of the Biden ‘Overhang.’ This will take a while, has NOTHING TO DO WITH TARIFFS, only that he left us with bad numbers, but when the boom begins, it will be like no other. BE PATIENT!!!”

The underwhelming economic report hit after economists predicted that the U.S. GDP would grow by 0.4% in the first quarter. GDP contracted instead as Trump’s tariff policies drove up imports, which are subtracted from net exports as part of the calculation of a final GDP figure. It is the first contraction in the U.S. economy since the first quarter of 2022, according to The Wall Street Journal.

Trump paused and cut billions in government spending, which suppressed GDP growth. Consumer spending fell, as well.

Trump’s moves on trade – hefty tariffs on China, Canada, and Mexico, alongside a flat 10% tariff across the board with higher duties threatened – had the largest impact on the GDP report. Net exports, which is U.S. exports minus imports, subtracted 5% from the rest of the GDP calculation, according to WSJ.

Wells Fargo economist Shannon Grein said that the topline GDP contraction makes the U.S. economy appear weaker than it is.

“The headline decline overstates weakness because a lot of that was tariff-induced pull-forward,” Grein said. “Overall, I think that it was a relatively solid underlying report when it comes to demand.”

The GDP report has sparked concerns that the United States could be in recession. A recession is typically defined as two consecutive quarters of economic contraction.

Commerce Secretary Howard Lutnick, in a cabinet meeting on Wednesday, said that Trump’s tariffs have spurred significant new investment in the United States. He also downplayed the impact of tariffs on the latest GDP numbers.

“I have the pleasure of running the investment accelerator, which gets to recruit these companies, and you’ve never seen anything like the companies committed to building in America. Technology companies have committed over $2.5 trillion to build in America based on your tariffs,” Lutnick said. “Sovereign countries all backing, the whole Middle East and all these countries backing their sovereign wealth funds, they all want to invest in America, and they’re coming in, again, over $3 trillion committed.”

Commerce Secretary @howardlutnick: "Technology companies have committed over $2.5 trillion to build in America based on your tariffs… Then you've got the whole pharma industry knows it's got to come home… Auto is coming home, industrial is coming home." pic.twitter.com/BHXpjTovB9

— Rapid Response 47 (@RapidResponse47) April 30, 2025

Trump announced new investments and pledges to the United States from companies committed to building domestically because of tariffs totaling $8 trillion.

President Trump and Commerce Secretary Lutnick tout the 8 TRILLION dollars of new investments in America as a result of tariffs.

Lutnick: "And this is all driven by your tariff policies. No chance this would be happening without it." pic.twitter.com/Q8nLnX294F

— Townhall.com (@townhallcom) April 30, 2025

How Trump And Rubio Put America First In 100 Days

Even before taking office, President Donald Trump began one of the most aggressive foreign policy overhauls in modern history.

Facing two major wars, Trump immediately set out to broker peace between Russia and Ukraine, and Israel and Hamas. His administration wasted no time. Even prior to taking office, efforts were underway to bring American hostages and detainees home. So far, the administration has secured the release of 47 unjustly detained Americans.

But Trump’s most dramatic move came through his partnership with Secretary of State Marco Rubio — a sweeping reorganization of the State Department aimed at restoring diplomatic strength and economic leverage.

Here’s what the president has done so far to redefine America’s role on the world stage and counter its global adversaries.

State Department Restructuring

CUTTING BLOAT: Under Rubio’s leadership, the State Department initiated sweeping changes to cut bureaucratic bloat, including plans to close 132 of its 734 offices and a directive giving undersecretaries 30 days to present plans to slash its personnel in individual departments by 15%.

USAID: After being intensely overhauled following an audit by DOGE, USAID was set to be merged into the State Department. Rubio was named acting deputy administrator and began the task of downsizing the $80 billion office. According to the State Department, Rubio oversaw an 85% cut to USAID programs.

CENSORSHIP AGENCY: In April, Rubio announced that the State Department would be closing its Global Engagement Center (GEC), which he claimed “was labeling American speech by Americans as foreign interference.” Originally established in 2011 to counter terrorist propaganda, GEC shifted to focusing on combatting domestic “misinformation” after the 2016 election. According to Rubio, the GEC will also be investigated for being “used as a weapon against the American people.”

Returning Hostages And Wrongfully Detained Americans

ISRAELI HOSTAGES: Just days before taking office, Trump’s incoming administration — working alongside the outgoing Biden administration — successfully negotiated a ceasefire and hostage deal between Israel and Hamas. The ceasefire, along with a separate deal for Thai nationals, led to the release of 38 hostages before the agreement collapsed in March. Released American hostage Keith Siegel visited Trump at the White House in March and credited his administration’s efforts with saving him.

AFGHANISTAN RELEASE: Just hours after Trump was sworn into office, the Taliban released American hostage Ryan Corbett, who spent 894 days in captivity in Afghanistan. Corbett and William Wallace McKenty were exchanged in a prisoner swap for terrorist Khan Muhammad, who was serving a life sentence in California. Corbett’s family fought tirelessly to secure the release of their loved one. 

VENEZUELA RELEASE: Trump’s envoy for special missions, Richard Grenell, secured the release of six Americans from socialist-run Venezuela in February. In an interview with The New York Times, three of the prisoners said they were confined to cement cells, beaten, psychologically tortured, and pepper-sprayed. All three were kidnapped as tourists visiting the country.

RUSSIA RELEASE: The Trump Administration secured the release of American schoolteacher Marc Fogel in February and Russian-American amateur ballerina Ksenia Karelina in April. Fogel, sentenced to 14 years in 2021 for possessing medical marijuana, was welcomed at the White House upon his return and called Trump “a hero.” Karelina was arrested in 2024 while visiting her grandmother and sentenced to 12 years for treason after donating $51.80 to Razom, a U.S. charity providing humanitarian aid to Ukraine.

Peace Push

UKRAINE RUSSIA: Trump’s team has made significant efforts toward ending the war in Ukraine, successfully reestablishing diplomatic contact for the first time in three years. Trump has met twice with Ukrainian President Volodymyr Zelensky and dispatched Special Envoy to the Middle East Steve Witkoff to hold talks with Russian President Vladimir Putin. Rubio and other senior officials have also engaged directly with their Russian counterparts. Though Trump has expressed frustration with both sides during the negotiations, talks remain active and ongoing.

ISRAEL-HAMAS: Despite the collapse of the previous ceasefire, the Trump administration continues to push for an end to the conflict and the release of the 59 remaining hostages in Hamas captivity. Trump has floated unconventional plans to bring long-term stability to the Gaza Strip — including relocating Gazans elsewhere in the region and placing the area under the control of the United States. With the area rid of terrorists, Trump says Gaza could transform into the “Riviera of the Middle East.”

IRANIAN NUCLEAR DEAL: President Trump’s team is preparing for a third round of negotiations with Iran in an effort to prevent the regime from obtaining a nuclear weapon. Trump, a loud opponent of  President Barack Obama’s 2015 Iranian nuclear deal, exited the deal in 2017, calling it one of the worst and most one-sided transactions the United States has ever entered into. Trump’s team is pushing a stricter deal that blocks Iran from enriching its own uranium for its civilian nuclear program. If negotiations fail, the president has repeatedly warned that military action remains on the table to disrupt Iran’s nuclear ambitions.

Taking On Adversaries And Enemies

PANAMA CANAL: The Trump administration has made it clear it will no longer tolerate growing Chinese influence over the Panama Canal. Trump has routinely escalated pressure on Panama over the Chinese companies operating at both ends of the canal and reportedly directed U.S. Southern Command to draft military options for taking the canal by force. Some progress was made following Secretary Rubio’s February visit, when the Panamanian government announced it would allow U.S. Navy ships to pass through for free, though Trump has since demanded that all American ships — including commercial vessels — also pass toll-free.

CHINA: Trump isolated China by imposing a 145% tariff on Chinese imports while granting a 90-day delay on tariffs for other countries, aiming to establish freer trade relationships. China responded with a 125% tariff, though Treasury Secretary Scott Bessent pointed out that it’s less impactful, as China exports five times the amount of goods to the United States. The Trump administration also sanctioned Beijing and Hong Kong authorities for undermining Hong Kong’s autonomy, and visa restrictions were placed on foreign officials involved in the return of Uyghurs to China and for restricting access to Tibet, according to the State Department.

IRAN: Despite ongoing negotiations, Trump has maintained his maximum pressure campaign on Iran, using sanctions to target Iranian petroleum and petrochemical entities that fund Tehran’s nuclear program, missile development, and terrorist proxies, according to the State Department. Last week, sanctions were imposed on two Iranian petroleum magnates, one of whom was caught attempting to export cargo to China off the coast of Houston last year. In total, 72 entities, 14 individuals, and 74 vessels were sanctioned.

HOUTHIS: First, Trump re-designated the Houthis as a Foreign Terrorist Organization, reversing President Biden’s earlier decision to remove them. Second, he instructed the military to launch weeks of intensive airstrikes in response to the group’s more than 100 attacks on international cargo ships, tankers, and naval vessels following Hamas’ October 7 assault on Israel. Since March, over 800 Houthi targets have been hit, resulting in the elimination of hundreds of fighters and leaders, and Houthi ballistic missile launches and suicide drone attacks are down 69% and 55% respectively, reported Fox News.

Foreign Visitors

GOLD CARD VISA: In a bid to attract high-net-worth immigrants to the United States, Trump unveiled his plan for a “Gold Card” visa. For $5 million, visa holders would have Green Card privileges and a potential path to citizenship. According to Trump, visa holders would contribute to the U.S. economy by spending money, paying taxes, and creating businesses.

REVOKING VISAS: Trump has cracked down on foreign visa holders participating in activities aligned with terrorist organizations, including antisemitic protests on college campuses. Several students and recent graduates have had their visas revoked and have been detained by immigration officials. The most high-profile arrest so far has been Columbia University graduate Mahmoud Khalil, who is accused of being a ringleader of the anti-Israel protests at his former university. DHS has alleged that Khalil “led activities aligned to Hamas.” Controversy over the arrests has erupted in the media, and several cases are being reviewed by courts around the country.

VETTING IMMIGRANTS FOR ANTISEMITISM: The Trump administration will now begin screening immigrants’ social media for antisemitic content and any history of physically harassing Jews. Any information found may be grounds for denying immigration benefit requests for immigrants applying for permanent residency, foreign students, and individuals affiliated with educational institutions linked to antisemitic activity.

WOKE GENDER IDEOLOGY: As part of its effort to counter woke gender ideology, the State Department announced it will protect girls and women in academic and professional-level sports by refusing to issue visas for biological men entering the U.S. to compete in women’s sports. The State Department will also not provide funding for or take part in cultural exchange programs that allow biological men to participate in women’s sports. The move comes in addition to the State Department announcing it will stop issuing passports with “X” as a sex marker.

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