U.S. Economy Expands by a Healthy 2% in Q1

TD Bank reports U.S. Q1 GDP grew 2.0% annualized (vs. 2.3% consensus), up from Q4-2025’s 0.5%. Strength was led by a 10.4% jump in business investment (equipment +17.2%, IP +13.0%), a 1.6% rise in consumer spending and a 4.4% rebound in government outlays; trade was a drag as imports surged. Core PCE inflation accelerated sharply to a 4.3% q/q annualized pace. For markets such as the US SP 500, robust investment and sustained growth are supportive for equities, especially cyclical and tech-linked sectors, but the jump in core inflation could raise Fed concern and increase volatility as investors reprice policy and growth-risk tradeoffs.