Wall Street rebounded on Thursday thanks to strong earnings by tech giants Meta, Microsoft, and other companies. These results helped reinvigorate investor confidence, despite new economic data that indicated persistent headwinds.
The positive quarterly results were a welcome counterbalance for recession concerns and the renewed concern about job market weaknesses in the US.
The Dow Jones Industrial Average climbed by 246 points or 0.6% while the S&P 500 jumped more than 1%.
Nasdaq, the tech-heavy stock index, grew by more than 2 percent, mainly due to strong performance in stocks related to information technology, especially those tied with AI and cloud computing.
Meta Platforms’ first-quarter revenues exceeded Wall Street estimates, confirming its position in the face of macroeconomic challenges.
Daily Active People +6% YoY, to 3,43B. Ad impressions up 5% year-over-year. * Revenue up +16% year-over-year to $42.3B (a $1.0B increase). * Operating margin 41% (+4pp Y/Y). EPS of $6.43 (up $1.21). * FY25 Capex: $64-$72B (prev. $60-$65B).
CEO Mark Zuckerberg noted during the company’s earnings call that Meta is “performing very well” and remains “well positioned to navigate the macro uncertainty”–language that reassured investors fearing a slowdown in tech.
Microsoft, on the other hand, exceeded both its revenue and profit expectations for its third fiscal quarter. Azure cloud services showed a particularly strong performance.
The executives predicted a surge in capital expenditures aimed at increasing AI and datacenter infrastructure. They stated that cloud and AI were “essential inputs” for any business looking to increase output, lower costs and accelerate growth.
Microsoft $MSFT Q1 25 results Revenue $70.0B Q1 24 $61.9B +13.1% Est. $68.4B beat EPS $3.46 Q1 24 $2.94 +17.7% Est. $68.4B beat EPS $3.46 Q1 24 $2.94 +17.7% Est.
Microsoft shares soared by 8% after the news, and Meta stock rose 4%.
AI is not the only name that has gained popularity.
Nvidia is a leader in AI chips and has advanced by 4%. This helped the Information Technology sector to gain 3% on the day. It was the top-performing segment within the S&P 500.
But economic clouds still lingered.
The Dow Jones estimated that weekly jobless claims would be 225,000, but they unexpectedly jumped to 241,000. This sparked fears of a cooling in the US labour market.
The report comes after a first quarter GDP report that showed the US contracted by 0.3% on an annualized basis, falling short of forecasts of modest growth.
This was the first decline in US growth for a quarter since early 2022.
Investors are now focusing on Friday’s Nonfarm Payrolls Report for April. This report could provide further insights into the strength of the labor market and help determine the next Federal Reserve policy decision.
Some of the Wednesday losses were erased by the rebound in technology stocks.
Fears sparked from weak economic data caused major indexes to plummet.
S&P 500 dropped more than 2 percent in mid-session while Dow Jones fell over 780 before turning around to finish the session on the positive side.
The US equity market ended April on a mixed tone despite Thursday’s rally.
S&P 500 & Dow both posted declines in the month of February, 0.8% & 3.2% respectively. This was due to volatility caused by unexpected tariffs from President Donald Trump and concerns about global growth.
Nasdaq composite rose 0.9% in the last month, as technology names recovered.
The post US Stocks Rally as Meta, Microsoft Earnings Revive AI Despite Economic Fears may be updated as new information becomes available.
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