U.S. stock futures pointed sharply down on Wednesday as investors braced for a deluge of earnings and data — and digested news of shrinking GDP for the first time since 2022.

Nasdaq futures led the decline, down almost 1.9%, while the S&P plunged 1.4%. The Dow Jones Industrial Average sank just under 1%.

Microsoft (MSFT) and Meta (META) report earnings after the bell, while two major economic reports — the advance estimate of first-quarter GDP and the Employment Cost Index — were released before the bell.

Here’s what to watch today.

U.S. economy contracts, markets flinch

The U.S. economy shrank for the first time since 2022, as rising imports weighed on GDP and inflation ran hotter than expected.

According to the Bureau of Economic Analysis’s advance estimate, gross domestic product contracted at an annualized rate of 0.3% in the first quarter — steeper than the 0.2% decline economists had forecast. The drop marked a sharp reversal from the 2.4% growth rate logged in the final quarter of 2024.

Prediction markets now point to strong belief that a recession is on the way — or already underway.

Visa beats on earnings, market shrugs

Visa (V) posted a strong Q2, with non-GAAP EPS up 10% to $2.76 and revenue rising 9% to $9.6 billion. Payments volume grew 8%, cross-border volume rose 13%, and the company announced a $30 billion buyback. Still, the stock moved lower premarket — perhaps because the beat was already baked in. Visa shares are up 25% in the last 12 months.

Starbucks stock sinks on slipping sales

Starbucks (SBUX) shares tumbled 8% after reporting a rough quarter. U.S. comparable sales dropped 2% on a 4% decline in transactions, while international operating income fell 7%. Overall EPS sank 50%. Executives blamed restructuring costs and bad weather, but flat China sales and shrinking foot traffic point to a broader consumer slowdown. Shares sank 9% premarket.

Yum and Mondelez buck the trend

Yum Brands (YUM) delivered a solid quarter: EPS rose 13% as strength at Taco Bell and KFC offset weakness at Pizza Hut. CEO David Gibbs credited Yum’s global reach, digital momentum, and a new AI partnership with Nvidia (NVDA).

Mondelez (MDLZ) also posted strong results, with organic revenue up 4.2% and EPS nearly 9% higher. Emerging markets drove growth, while North America held steady. Cookies and chocolate, it turns out, remain a resilient indulgence even as pricier café visits lose steam.

Travel demand stays afloat

Booking Holdings (BKNG) beat expectations with 8% revenue growth and a 7% increase in gross bookings. Alternative accommodations outpaced traditional hotels, and the company saw a big jump in flight bookings. The results stand in contrast to recent airline warnings, hinting that travelers may be shifting how — but not whether — they spend.

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