Wall Street opened with a surge of optimism on Thursday, as stocks soared and key U.S. indexes posted significant gains.
This surge was primarily driven by robust earnings from large technology companies, with the tech-oriented Nasdaq Composite leading the charge, rising more than 1.52%. This rise was fueled by strong quarterly results from Meta Platforms and Microsoft, which boosted investor sentiment.
This positive development comes on the heels of a period of uncertainty that had global markets on edge. Just weeks prior, the U.S. administration had announced new tariffs on April 2, a policy shift that caused concern among foreign investors. This announcement led to a downturn in currencies and growth forecasts in the affected economies.
However, the recent corporate results from large tech companies have shifted the focus back to business fundamentals, providing a much-needed respite from the tariff-induced anxiety.
Tech Giants Lead the Charge
The S&P 500, a key indicator of the health of the U.S. economy, gained 35.04 points, or 0.63%, ending the day at 5,604.11. This marked an eighth consecutive day of increases, its longest winning streak since August 2024. The Dow Jones Industrial Average also rose, gaining 83.42 points, or 0.21%, to 40,752.78.
The Nasdaq, buoyed by the strong performance of tech stocks, rose 264.40 points, or 1.5%, to close at 17,710.74, outperforming the other two indexes. Microsoft's quarterly earnings and revenue exceeded forecasts, driven by growth in its cloud services. Meta Platforms also reported strong results, bolstered by robust advertising sales and rising user engagement.
These positive reports have contributed to boosting market confidence and alleviating earlier concerns about a potential slowdown in the economy. As of now, 325 companies in the S&P 500 have reported their first-quarter earnings, and 74 percent have exceeded analysts' expectations, according to data from LSEG.
Mixed Economic Indicators Amidst Tech Boom
However, not all economic indicators were positive. U.S. factory activity remained in contraction territory for the month, and initial jobless claims were higher than expected. These signals suggest a mix of trends in the overall economy, even as tech stock performance props up market indices.
Global markets were also affected by the May Day holidays, leading to thin trading in Asia and Europe. The MSCI All Country World Index increased 0.18% to 835.01. Japan's Nikkei index rose 1.13 percent, while emerging market stocks were down 0.27 percent.
Currency traders also reacted to economic updates from Japan. The Japanese yen fell as the Bank of Japan cut its growth forecast due to uncertainty over global trade. The dollar index gained 0.52% to 100.19, and the euro was at $1.1289, down 0.34%.
