Markets wavered and then rallied Wednesday following news of the first U.S. economic contraction in three years.

Major indices regained ground to end nearly flat: The Dow Jones Industrial Average finished up 0.35%, the S&P 500 added 0.13% and the Nasdaq was down 0.09%.

The slow day came as the Bureau of Economic Analysis reported gross domestic product declined by 0.3% in the first quarter of 2025. This marks the first contraction of the U.S. economy during a quarter since the first quarter of 2022.

The economic news pushed markets sharply lower in early trading Wednesday, but reports showing inflation had decelerated to 2.3% helped them regain much of the losses.

A separate report on jobs performance released by ADP showed hiring for the month came in lower than expectations.

The decrease in GDP was primarily due to a drop in imports, which fell by over 5% in the first quarter. This could be an indication that the specter of tariffs has cooled imports into the U.S. Earlier this month, President Donald Trump implemented a global 10% duty on most goods entering the country, having previously placed a 25% tariff on steel and aluminum imports.

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President Trump placed blame for the sour economic performance on his predecessor.

This is Biden’s Stock Market, not Trump’s," the president wrote in a Wednesday post on social media, saying the current economic malaise "has NOTHING TO DO WITH TARIFFS."