S&P 500 Flat as U.S. GDP Falls Short of Forecasts

The S&P 500 (SPX) is close to unchanged on Wednesday after the Bureau of Economic Analysis' latest gross domestic product (GDP) estimate came in weaker than expected. The U.S. economy grew at an annualized rate of 1.5% in the second quarter, missing expectations of 1.8% and unchanged from the prior estimate. That also marks a slowdown from 2.1% in the first quarter.

On the bright side, consumer spending, which accounts for roughly two-thirds of GDP, rose 3.4%, up from the previous estimate of 3.2%. The resilient spending came despite surging gas prices and persistent inflation.

AI Imports Weigh On GDP Growth

However, rising AI-related imports, which include computers and semiconductors, weighed on GDP growth and partially offset the boost from consumer spending. Imports act as a drag on GDP because spending on foreign-produced goods does not directly contribute to U.S. economic output. In addition, government spending was revised lower, also pressuring growth.

The report is the BEA's second estimate of second-quarter GDP. The agency will publish the third estimate on September 30.