The three major U.S. stock indices have all accumulated declines of over 4%! Ama

**Major indexes closed lower, with the Nasdaq plunging 2.04%

* U.S. labor cost index rose 1.2% quarter-over-quarter in Q1, the largest increase in a year

* AI demand surges, Amazon's Q1 cloud business sales up 17% year-over-year

On Tuesday, April 30th (local time), ahead of the Federal Reserve's latest interest rate decision, the three major U.S. stock indexes opened low and saw losses widen towards the close, ending the day significantly down. Earlier economic data revealed continued heating inflationary pressures and a contraction in manufacturing activity, intensifying market concerns about the U.S. economy entering a stagflation phase. On another front, investors awaited the latest batch of large-cap tech earnings reports and the upcoming April non-farm employment figures.

By the close of the day, the Dow Jones Industrial Average fell 570.17 points, or 1.49%, to 37,815.92; the S&P 500 index dropped 1.57% to 5,035.69; and the Nasdaq Composite index declined 325.26 points, or 2.04%, to 15,657.82.

In terms of industry sectors, all eleven sectors of the S&P 500 index fell. The energy sector and the consumer discretionary sector led the decline with drops of 2.89% and 2.66%, respectively, while the healthcare sector saw the smallest decrease of 0.11%.

With this, all three major indexes ended April with losses exceeding 4%, snapping a five-month winning streak. In April, the Dow fell 5.01%, the S&P 500 index fell 4.16%, and the Nasdaq fell 4.41%. The S&P 500 and the Nasdaq posted their largest monthly declines since September 2023, while the Dow recorded its largest drop since September 2022.

After the market closed, Amazon released its Q1 2024 financial results, showing a 17% year-over-year increase in sales for its cloud computing division (AWS) due to rising AI demand. Boosted by this, Amazon's stock price rose 2.4% in after-hours trading as of the time of writing.

Amazon's first-quarter revenue grew 13% to $143.3 billion, compared to analysts' expectations of $142.6 billion. Operating profit for the quarter was $15.3 billion, versus analysts' expectations of around $11 billion. Cloud business sales were $25 billion, compared to analysts' expectations of $24.1 billion. AWS's first-quarter profit was $9.42 billion, with an operating margin of 37.6%, marking the highest level since Amazon began disclosing cloud business sales figures.

The company's CEO, Andy Jassy, stated in a release that this was due to the modernization of infrastructure and the increasing attractiveness of AWS's AI capabilities.Recently released economic data indicates that the U.S. Conference Board's Consumer Confidence Index (CCI) fell to 97 in April, marking the lowest level since July 2022, with the revised figure for March at 103.1. Manufacturing activity in the Chicago area contracted, with the April Purchasing Managers' Index (PMI) at 37.9, the lowest since November 2022. The Employment Cost Index (ECI) grew by 1.2% in the first quarter, the largest increase in a year, surpassing market expectations of 1% and the previous figure of 0.9%.

Analysts have stated that these figures suggest an increased risk of the U.S. economy entering a stagflation phase. There is growing concern in the market that the Federal Reserve may reduce the number of rate cuts this year, and there is even a possibility that no rate cuts will occur.

Phil Flynn, a senior market analyst at Price Futures Group, said that traders are increasingly factoring in the risk of the Federal Reserve potentially raising interest rates again at some point, rather than maintaining them at the current level.

On the other hand, analysts at Standard Chartered expect the current stagnation in the disinflation process to be temporary. They believe that the stock market correction and the rise in bond yields have created opportunities for increasing diversified allocations.

Thomas McGarty, head of equity business at RBC Wealth Management, stated, "Although company earnings and guidance are relatively positive, they are somewhat overshadowed by concerns about sticky inflation and rising Treasury yields."

The Federal Reserve began a two-day monetary policy meeting on Tuesday, with expectations to keep the federal funds rate target range unchanged at between 5.25% and 5.5%. Investors' focus is believed to be on Federal Reserve Chairman Powell's views on the direction of interest rates in the coming months.

In terms of individual stocks, Tesla's share price closed down by 5.55%, following the announcement that two executives would be leaving the company and plans for further layoffs of several hundred employees.

Eli Lilly's stock rose by 5.95%, with first-quarter revenue of $8.768 billion, a 26% increase year-over-year, and an upgrade to its full-year performance guidance, due to strong sales of the diabetes drug Mounjaro and the newly launched weight loss drug Zepbound.

McDonald's fell by 0.19%, with first-quarter results missing expectations due to a slowdown in growth in the U.S. market and the impact of the Israeli-Palestinian conflict.

Media group Paramount Global fell by 7.18%, with the announcement that CEO Bob Bakish would be stepping down, and the company is in acquisition talks with Skydance Media. Reports suggest that the latter has recently submitted a final bid to Paramount, with an estimated total transaction value of around $5 billion.3M Company's stock rose by 4.72% as its first-quarter performance exceeded analysts' expectations, and it indicated that it anticipates its dividend payout ratio to be around 40% of adjusted free cash flow.

Paypal's stock increased by 1.39%, with the total payment volume for the first quarter growing by 14% year-over-year to $403.9 billion, surpassing analysts' forecasts.

NXP Semiconductors' stock jumped by 3.67%, with its second fiscal quarter revenue and the midpoint of adjusted earnings per share guidance exceeding market expectations.

According to data from the London Stock Exchange Group (LSEG) as of Monday, more than half of the S&P 500 companies have reported their first-quarter earnings, with overall earnings 9.5 percentage points higher than analysts' expectations. The full-year earnings growth forecast for 2024 has also been raised to 10%, indicating strong fundamentals among listed companies.

In terms of commodities, oil prices continued the downward trend from Monday, with the June delivery West Texas Intermediate (WTI) crude oil futures on the New York Mercantile Exchange falling by 70 cents, a decrease of 0.85%, to close at $81.93 per barrel.

The U.S. Energy Information Administration (EIA) released data on Tuesday showing that U.S. crude oil production in February increased from 12.58 million barrels per day in January to 13.15 million barrels per day, marking the largest monthly increase since October 2021. Concurrently, exports in February climbed from 4.05 million barrels per day in January to 4.66 million barrels per day.

On the same day, the settlement price for gold futures fell by 2.3%, closing at $2,302.9 per ounce.