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U.S. stocks slipped on Wednesday, halting April’s market rebound, after data showed the economy unexpectedly contracted in the first quarter, rekindling concerns about a possible recession amid heightened policy volatility from the Trump administration.

The Dow Jones Industrial Average fell 230 points, or 0.6%, while the S&P 500 declined nearly 1%. The tech-heavy Nasdaq Composite fared worse, ending the day down 1.4%.

The latest GDP reading from the Commerce Department showed the U.S. economy shrinking at an annualized rate of 0.3% in the first quarter — a sharp reversal from the 2.4% growth logged in the previous three months. While some analysts attributed the downturn to a rush of imports, which jumped 41% in the prior quarter as companies tried to front-run new tariffs, the report also flagged worrying signs: a slowdown in consumer spending and a pullback in government expenditure, including Elon Musk’s high-profile DOGE cost-cutting initiatives.

Still, not all data was discouraging. Consumer spending in March grew 0.7%, beating expectations for a 0.5% increase and hinting at some resilience in the economy despite the broader downtrend.

The weak economic print derailed what had been a strong comeback in equities this month. After President Trump’s sweeping tariff announcement on April 2 rattled investors and dragged the S&P 500 down more than 11%—nearly 20% off its February peak—the index had clawed back most of those losses as the White House dialed down its stance. Heading into Wednesday, the benchmark was down just about 1% for April.

Optimism had returned on Tuesday, after Commerce Secretary Howard Lutnick hinted at an impending trade deal, though he did not disclose with which country. Later in the day, Trump confirmed that talks with India were progressing well and a deal could be on the horizon.

But that optimism was short-lived. Wednesday’s GDP report raised fears that the damage from policy whiplash may have already begun to take its toll, even before any major trade agreements are finalized.

Trump, addressing the GDP figures on Truth Social, pinned the blame on a “Biden ‘Overhang’” and urged Americans to be patient saying his policies “will take a while” to show results.

On the corporate front, solar manufacturer First Solar saw its shares dive 9% after CEO Mark Widmar warned that Trump’s tariffs were a “significant economic headwind” for its operations, prompting the firm to cut its annual outlook. GE Healthcare also revised its guidance downward, citing tariff-related pressures.

In the tech sector, Nvidia shares slid 2% in sympathy with Super Micro Computer, whose stock plunged 15% following disappointing preliminary results for the fiscal third quarter.

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