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IBM ( IBM ) down after HashiCorp ( HCP ) deal, disappointing Q1 revenue

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Caterpillar ( CAT ) falls on downbeat Q2 sales forecast

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Indexes down: Dow 1.61%, S&P 1.30%, Nasdaq 1.77%

(Updated at 11:34 a.m. ET/1534 GMT)

By Shristi Achar A and Shashwat Chauhan

April 25 (Reuters) -

U.S. stocks slumped on Thursday as most megacaps fell after

Meta Platforms' ( META ) quarterly results, while sentiment was shaken

amid signs of persistent inflation that dampened hopes of the

Federal Reserve easing monetary policy anytime soon.

Meta plunged 13.0% after the Facebook-parent

forecast higher expenses and lighter-than-expected revenue.

Other growth stocks also came under pressure, with Alphabet

, Amazon.com ( AMZN ) and Microsoft ( MSFT ) down

between 2.3% and 4.1%.

Meanwhile, U.S. economic growth slowed more than expected in

the first quarter, but an acceleration in inflation suggested

that the Fed would not cut interest rates before September.

"The combination of some bad earnings and bad economic

reports when it comes to inflation kind of set us off on this

trend right now," said Joe Saluzzi, co-founder of Themis

Trading.

"It's too soon to be tossing around words (like)

stagflation, where the economy is wallowing and inflation is

still rising. Those data points certainly would support that,

but it's kind of early to say we're in that mode."

Alphabet, Microsoft ( MSFT ) and Intel ( INTC ) are scheduled to

report their quarterly numbers on Thursday after markets close.

Yields across government bonds advanced, with the yield on

the 10-year Treasury note rising to multi-month

highs. It was last standing at 4.7019%.

Separately, the number of Americans filing new claims

for

unemployment benefits

unexpectedly fell last week, pointing to still tight labor

market conditions.

The data comes ahead of the Personal Consumption

expenditures (PCE) index, the Fed's preferred inflation gauge,

on Friday.

Money markets are pricing in just about 36 basis points

of rate cuts from the Fed this year, down from about 150 bps

seen at the start of the year, according to LSEG data.

At 11:34 a.m. ET, the Dow Jones Industrial Average

was down 619.28 points, or 1.61%, at 37,841.64, the S&P 500

was down 65.74 points, or 1.30%, at 5,005.89, and the

Nasdaq Composite was down 278.87 points, or 1.77%, at

15,433.88.

Communication services led losses across the

major S&P 500 sectors with a 5% fall, on track for its biggest

one-day decline since October.

Downbeat results from other companies also weighed on

equities, with International Business Machines ( IBM ) shedding

9.2% after the firm said it will buy HashiCorp ( HCP ) in a deal

valued at $6.4 billion, and as its first-quarter revenue missed

estimates.

Southwest Airlines ( LUV ) slid 8.4% after slashing its

estimates for new aircraft deliveries from Boeing ( BA ) in 2024

for the third time, saying it plans to undertake cost-cutting

measures to ease the resultant blow.

Caterpillar ( CAT ) lost 7% after the company said it

expects sales to fall in the second quarter as demand for its

construction equipment eases from last year's boom.

On the bright side, Newmont ( NEM ) gained 10.2% after the

world's largest gold miner beat Wall Street estimates for

first-quarter profit.

Declining issues outnumbered advancers for a 4.78-to-1

ratio on the NYSE and for a 3.25-to-1 ratio on the Nasdaq.

The S&P index recorded 11 new 52-week highs and six new

lows, while the Nasdaq recorded 16 new highs and 146 new lows.