Stan Choe, AP Business Writer
NEW YORK (AP) — U.S. stocks gather more Thursday as they accumulate better profits than expected for US companies, but the CEO says he’s not sure it will continue due to the uncertainty created by President Donald Trump’s trade war.
The S&P 500 was 1.5% higher in afternoon trading. The Dow Jones industrial average rose 339 points (0.9%) as of 12:17pm ET, with Nasdaq Composite rising 2%.
ServiceNow helped AI platform companies boost the market after delivering stronger profits than analysts had expected at the start of 2025. The company, which helps AI agents manage clients, jumped in stock by 15.1% after giving it a forecast range for future subscription revenues that exceeded what some analysts expected.
Similarly, Southwest Airlines reported stronger results for the first three months of the year than analysts expected, but its stocks were flying between losses and profits. The economic outlook looks so cloudy that it has become the latest US airline to say it is pulling some of this year’s financial forecasts.
CEO Bob Jordan said the company is “controlling what we have control,” reducing how much it will fly later this year. Southwest shares have recently fallen 1.2%.
Meanwhile, rival American Airlines said it will pull out full-year financial forecasts and provide an update “as the economic outlook becomes clearer.” The stock rose 2.5% after exceeding profit expectations.
Because of the repetition of Trump’s tariffs, businesses across the industry have spoken about how difficult it is to provide financial forecasts for that year, as Wall Street normally expects.
US stocks have collected the past two days in hopes that Trump is tempering his approach to tariffs and his criticism of the Federal Reserve, which had previously shaken up the market. But China, the world’s second-largest economy, denied both sides being involved in aggressive negotiations over tariffs on Thursday, saying the proposal to advance on the issue is less grounded than trying to “snap the wind.”
Calling Trump’s policy announcement “a turbulence of headlines,” Tan Jin Yi, of the Asia & Oceania Treasury Ministry at Mizuho Bank, warned that the global economy could be hurt in the long term, adding that “feeling has given economic bleak from strong hopes of bailout.”
This week began with a sudden loss against fears about the trade war, but it was a microcosm of the severe fluctuations that have rocked the markets volleys as investors wrestled with the way they respond to conditions that appear to change hourly. The only certainty for the future is that unless many investors repeat, the market is likely to continue to cast it until it becomes more clear with tariffs that many investors expect to cause a recession.
“It’s a background in an unhealthy market right now, and we try not to respond very much,” said John Belton, portfolio manager at Gabelli Funds.
Households across the US are preparing for higher prices than economists would say will bring tariffs, but the head of the International Monetary Fund has urged them to move “quickly” to resolve trade disputes that threaten global economic growth.
In the meantime, many US companies continue to report stronger profits in the beginning of 2025 than expected analysts, but offer caution and uncertainty about this year.
Toy company Hasbro was the winner, jumping to 15.9% after reporting that it had more profits and revenues in the latest quarter than analysts had expected. It cited the powerful growth of its magic: among other products.
Similarly, Texas Instruments rose 6.3% after semiconductor companies reported stronger profits than expected.
They helped offset the 5% decline in Procter & Gamble. This fell despite the company behind Olay, Tide and Pampers reporting stronger results than recent quarter results. That revenue has fallen below expectations, and forecasts for profit growth have also been reduced this fiscal year.
Procter & Gamble said they expect a $200 million hit in revenue due to the high cost of the product.
At PepsiCo, CEO Ramon Ragualta said his company expects “more volatility and uncertainty” and “manager conditions in many markets remain curtailed, with equally uncertainty prospects.”
His company’s shares fell 4.4% after beverage and snack makers reduced forecasts on a fundamental measure of profit over 2025. The 25% tariff on imported aluminum for cans is one of those who have collided with PepsiCo and other beverage manufacturers.
In the bond market, Treasury yields continued to ease after their bewildered drive rose earlier this month. While harvests usually drop when fear controls the market, their surprising rises have sparked fear that the US bond market has lost its status as one of the safest places in the world to maintain cash due to Trump’s trade war.
Treasury yields fell to 4.32% from 4.40% on Wednesday.
It sank last week after reporting that only a few more U.S. workers were seeking unemployment benefits than economists expected. Another report says sales of previously occupied homes have weakened more than expected in March.
Foreign stock markets have mixed indexes amid a modest movement across much of Europe and Asia.
AP business writers Yuri Kageyama and Mat Ott contributed.
Original issue: April 24, 2025 7:51am EDT
