United States benchmark averages rose on Thursday (Friday AEST), starting the new month on a positive note as upbeat earnings from Microsoft and Meta Platforms reassured investors about continued momentum in artificial intelligence (AI), despite broader economic concerns.
The Dow Jones Industrial Average climbed 83.6 points, or 0.2%, to 40,753.0. The S&P 500 gained 35.1 points or 0.6% to close at 5,604.1, while the Nasdaq Composite jumped 264.4 points, or 1.5%, finishing the session at 17,710.7.
In addition to Microsoft's quarterly results, Meta's results also boosted investor sentiment. Meta posted better-than-expected revenue for the first quarter, with CEO Mark Zuckerberg expressing confidence in the company’s resilience. “We’re well-positioned to navigate the macroeconomic uncertainty,” he said during Wednesday’s earnings call.
Microsoft also reported solid third-quarter results, beating revenue and earnings expectations. The company noted that capital expenditures would rise as it scaled its data centre operations to support its AI ambitions.
The results triggered a rally in tech stocks, with Microsoft shares gaining 7.6% and Meta advancing 4.2%. The information technology sector led the S&P 500, rising more than 2% and outperforming all other sectors.
Despite the tech-driven rally, economic data weighed on broader market enthusiasm. Weekly jobless claims rose to 241,000, surpassing forecasts of 224,000, compounding concerns sparked by Wednesday’s weaker-than-expected gross domestic product (GDP) report.
The unemployment report has now heightened anticipation for April’s non-farm payrolls release on Friday, which could offer further insight into the labour market strength.
The S&P 500 and Dow ended April with losses of 0.8% and 3.2%, respectively. The Nasdaq Composite fared better, rising 0.9% over the month, largely due to technology stocks' strength.
On the bond markets, 10-year rates were 1.2% higher at 4.216%, while 2-year rates increased 2.3% to 3.697%.
