Bitcoin and Altcoins Rebound in Step With Wall Street’s Midday Recovery

Markets Rattle as GDP Shrinks and Inflation Surges, Spurring Stagflation Jitters

A wave of dismal economic data flipped early market optimism into losses on Tuesday, reinforcing fears that the U.S. economy may be slipping into stagflation.

The ADP employment report revealed a sharp slowdown in private sector hiring, with only 62,000 jobs added in April—far below the 108,000 expected and the weakest since July 2024. The disappointment set the stage for a grim GDP report minutes later.

First-quarter GDP unexpectedly contracted by 0.3%, missing forecasts for modest growth. A sharp rise in imports, triggered in part by pre-tariff stockpiling, dragged down economic output. Government spending, typically a growth contributor, also declined—marking the first pullback since 2022 and signaling potential fallout from the Trump administration’s renewed focus on fiscal tightening.

Making matters worse, the core PCE inflation gauge rose 3.5%—well above expectations—signaling that price pressures remain persistent.

Markets reacted swiftly. The Nasdaq fell 2%, the S&P 500 dropped 1.5%, and Bitcoin dipped 1% to trade around $94,300, mirroring broader risk-off sentiment.

With inflation proving sticky and growth turning negative, investors are bracing for heightened volatility in the weeks ahead.