- Resilient corporate earnings buoyed investor sentiment, driving market gains.
- US economic growth improved, but elevated inflation persists.
- Big Tech earnings showed strength, yet market reactions varied.
The S&P 500 and Nasdaq were on track to post their biggest monthly gains since 2020, as resilient corporate earnings helped steady investor sentiment despite a historic supply shock in global oil markets.
The rally suggested investors were leaning on earnings strength to look past geopolitical tensions, even as concerns persisted that prolonged conflict could eventually pressure corporate growth.
Earnings Resilience Supports Market Mood
“There’s this big tug of war, but the earnings side is winning so far. Market is trying to look through the near-term uncertainty, but of course, the longer it lasts, the more acute the pressures are,” said Angelo Kourkafas, senior global investment strategist at Edward Jones.
Major US Indexes Trade Higher
At 11:54 AM ET on Thursday, the Dow Jones Industrial Average rose 686.88 points, or 1.41 per cent, to 49,548.69.
The S&P 500 gained 33.56 points, or 0.48 per cent, to 7,169.99, while the Nasdaq Composite advanced 37.67 points, or 0.15 per cent, to 24,710.91.
The S&P 500 was headed for its biggest monthly gain since November 2020, the Nasdaq for its best month since April 2020, and the Dow for its strongest month since November 2024.
US Growth Improves But Inflation Remains Elevated
Data released on Thursday showed US economic growth picked up in the first quarter due to a rebound in government spending, though the increase may prove temporary as the war with Iran pushes gasoline prices higher.
US inflation accelerated in March in line with expectations. Core PCE inflation, the Federal Reserve’s preferred gauge excluding food and energy, rose 3.2 per cent in the 12 months through March, remaining above the Fed’s 2 per cent target.
Inflation Data Reinforces Fed Pause
“This reinforces the Fed’s decision to leave rates unchanged yesterday, and further corroborates the three dissenters view towards removing the easing bias in the Fed’s recent statement,” said Art Hogan, chief market strategist at B. Riley Wealth.
Regional Federal Reserve presidents Beth Hammack, Lorie Logan and Neel Kashkari had indicated inflation remained too high to support an easing bias.
Big Tech Earnings Mixed Despite Strong Results
Technology earnings were broadly strong, though investor reaction was mixed.
Alphabet rose 7.2 per cent to a record high after reporting a record quarter for its cloud business.
Meta Platforms fell 9 per cent and Microsoft declined 5 per cent after outlining capital spending plans. Amazon dropped 2 per cent after results despite beating cloud sales expectations.
Industrials Lead Sector Gains
Nine of the 11 main S&P 500 sectors traded higher, with industrials leading the advance after rising 2.4 per cent.
Oil Prices Stay Elevated Amid Iran Conflict Risks
Brent crude futures hit their highest level in nearly four years after an Axios report said President Donald Trump was expected to receive a briefing on possible military action against Iran.
Although oil prices retreated from session highs, Brent remained elevated at around $110 per barrel.
Notable Movers
Eli Lilly rose 9.6 per cent after lifting its annual profit forecast on sustained demand for weight-loss drugs.
Caterpillar climbed 10.1 per cent to a record high after reporting higher first-quarter profit.
Market Breadth Positive
Advancing stocks outnumbered decliners by 3.33-to-1 on the NYSE and 2.44-to-1 on the Nasdaq.
The S&P 500 posted 25 new 52-week highs and 14 new lows, while the Nasdaq Composite recorded 79 new highs and 81 new lows.
