U.S. stock markets closed higher on Thursday to start May. Strong earnings results by AI giants have boosted market participants’ confidence on risky assets like equities. No bad news on tariffs and trade related issues also bolstered investors’ sentiment. All three major stock indexes ended in green.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) rose 0.2% to close at 40,752.96. The blue-chip index posted a eight-day winning streak, for the first time since July 2024. Notably, 15 components of the 30-stock index ended in positive territory and 15 finished in negative zone.
The tech-heavy Nasdaq Composite finished at 17,710.74, rising 1.5% or 264.40 points due to strong performance of technology bigwigs. The S&P 500 was up 0.6% to finish at 5,604.14. The benchmark posted a eight-day winning run, for the first time since November 2024.
Eight out of 11 broad sectors of the broad-market index ended in positive territory and three in negative zone. The Technology Select Sector SPDR (XLK) rose 1.5%, while the Health Care Select Sector SPDR (XLV) fell 2.7%.
The fear-gauge CBOE Volatility Index (VIX) was down 0.4% to 24.60. A total of 16.15 billion shares were traded on Thursday, lower than the last 20-session average of 19.56 billion. Advancers outnumbered decliners on the NYSE by a 1.31-to-1 ratio. On Nasdaq, a 1.19-to-1 ratio favored advancing issues.
Earnings Data
Meta Platforms Inc. META reported first-quarter 2025 earnings of $6.43 per share, beating the Zacks Consensus Estimate by 23.18%. The figure surged 36.5% year over year. Revenues of $42.31 billion beat the Zacks Consensus Estimate by 2.61% and increased 16.1% year over year. At constant currency, revenues soared 19% year over year.
Microsoft Corp. MSFT reported third-quarter fiscal 2025 earnings of $3.46 per share, which beat the Zacks Consensus Estimate by 8.13% and increased 17.7% on a year-over-year basis. Revenues of $70.06 billion increased 13.3% year over year and beat the Zacks Consensus Estimate by 2.46%. At constant currency, revenues grew 15% year over year, showcasing strong demand for cloud and AI offerings.
Consequently, stock price of Meta Platforms and Microsoft climbed 9% and 7.6%, respectively. Both stocks currently carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Economic Data
The institute of Supply Management (ISM) reported that manufacturing PMI (purchasing managers’ index) for April contracted to 48.7% from 49% in March. The consensus estimate was 48.8%. Any reading below 50% indicates contraction in manufacturing activities. The new orders index rose to 47.2% in April from 45.2% in March. The Employment Index in April came in at 46.5% from March’s figure of 44.7%.
Construction spending decreased 0.5% in March, in contrast to the consensus estimate of an increase of 0.2%. The metric for February was revised downward to 0.6% from 0.7% reported earlier.
The Department of Labor reported that initial claims increased 18,000 to 241,000 for the week ended April 26, higher-than the consensus estimate of 225,000. Previous week’s data was revised upward from 222,000 to 223,000.
Continuing claims (those who have already received government aids and reported a week behind) increased 83,000 to 1.916 million. This is the highest level for insured unemployment since the week ended Nov. 13, 2021. Previous week’s data was revised downward by 8,000 to 1.833 million.
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Microsoft Corporation (MSFT): Free Stock Analysis Report Meta Platforms, Inc. (META): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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