Wall Street bounced back on Thursday, powered by robust earnings from tech giants Meta and Microsoft that helped reignite investor confidence in the artificial intelligence (AI) boom, even as fresh economic data signaled persistent headwinds.
The upbeat quarterly results provided a much-needed counterbalance to recession fears and renewed worries over US job market weakness.
The Dow Jones Industrial Average climbed 246 points, or 0.6%, while the S&P 500 jumped over 1%.
The tech-heavy Nasdaq Composite surged more than 2%, driven by strong performances in information technology stocks, particularly those linked to AI and cloud computing.
Meta Platforms reported first-quarter revenue that exceeded Wall Street expectations, reinforcing its strong positioning amid macroeconomic challenges.
$META Meta Q1 FY25:
👨👩👧👦 Daily active people +6% Y/Y to 3.43B.
👀 Ad impressions +5% Y/Y.
• Revenue +16% Y/Y to $42.3B ($1.0B beat).
• Operating margin 41% (+4pp Y/Y).
• EPS $6.43 ($1.21 beat).
• FY25 Capex: $64-$72B (prev. $60-$65B).
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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, meanwhile, topped both revenue and profit forecasts for its fiscal third quarter, with particularly strong momentum in its Azure cloud services.
Executives projected a rise in capital spending aimed at expanding AI and data center infrastructure, stating that “cloud and AI are the essential inputs for every business to expand output, reduce 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. $3.22 beat 🟢
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Microsoft stock surged 8% following the report, while Meta shares rose around 4%.
Other AI-related names also gained ground.
Nvidia, a leading player in AI chips, advanced by 4%, helping the information technology sector notch a 3% gain on the day, making it the best-performing segment of the S&P 500.
However, economic clouds lingered.
Weekly jobless claims unexpectedly rose to 241,000—well above the Dow Jones estimate of 225,000—fanning fears that the US labor market may be cooling.
This comes on the heels of a disappointing first-quarter GDP report, which showed the US economy contracted at an annualized rate of 0.3%, missing forecasts for a modest expansion.
That marked the first quarterly decline in US economic growth since early 2022.
Investors will now turn their attention to Friday’s nonfarm payrolls report for April, which could offer further insight into the labor market’s strength and influence the Federal Reserve’s next policy move.
The rebound in tech stocks helped erase some of Wednesday’s losses.
Major indexes had plummeted on fears sparked by weak economic data.
The S&P 500 briefly fell more than 2% mid-session, while the Dow Jones dropped over 780 points before reversing course to close in the green.
Despite Thursday’s rally, April ended on a mixed note for US equities.
The S&P 500 and Dow posted monthly declines of 0.8% and 3.2%, respectively, amid volatility sparked by President Donald Trump’s surprise tariff maneuvers and global growth concerns.
The Nasdaq Composite stood out, rising 0.9% for the month as tech names rebounded.
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