Associated Press Business Writer Stanchion
NEW YORK (AP) – Microsoft and Meta platforms are driving high on Wall Street Thursday as the profits of the big tech companies at the start of the year proved even greater than analysts expected.
The S&P 500 rose 1%, heading towards its eighth straight gain. This will be the longest winning streak since August. The Dow Jones industrial average rose 248 points (0.6%) as of 10:20am Eastern time, with the Nasdaq Composite rising 1.8%.
Microsoft has risen 9% after the software giant said its cloud computing and artificial intelligence business had risen 13% from the previous year.
Meta, the parent company of Facebook and Instagram, has achieved analysts’ goals for revenue and profits for the recent quarter. Artificial intelligence tools helped to increase advertising revenue, with stocks rising 5.3%.
CVS Health, Carrier Global and many other companies also joined in the forecasted profit reporting stream that has stabilized Wall Street last week. The S&P 500 returned to within 8.5% of its record set earlier this year, after falling nearly 20% above the mark.
Still, there remains a lot of uncertainty about whether President Donald Trump’s trade war will cause the economy to recession. Several mixed reports on the US economy on Thursday continued on several recent updates that suggest they are weaker than expected.
One report on Thursday said last week that more U.S. workers applied for unemployment benefits than economists expected, setting the stage for a more comprehensive report on the job market arriving Friday. Another update says US manufacturing activities are better than economists expected last month, but they signed back.
And while companies report better profits for the first three months of the year than analysts expected, many CEOs remain cautious about the rest of the year.
For example, General Motors reduced its for-profit forecast in 2025. He said he assumes he feels a hit of between $4 billion and $5 billion due to tariffs. Despite this, GM’s share price rose 2%. The automaker said it is expected to offset at least 30% of the tariff impact.
McDonald’s fell 1.3% after reporting revenues in the recent quarter than analysts expected, despite its profits slightly outperforming forecasts. An important underlying measure of performance at American restaurants was the worst decline since the community closed its global economy in 2020. McDonald’s CEO Chris Kempchinski said consumers are “attending uncertainty.”
McDonald’s joined Chipotle and other restaurant chains. Other restaurant chains are becoming more cautious of all the unknowns about the economy and inflation that are higher than many would like.
Such conditions pose the worst-case scenario threat called “STAGFLATION.” There, the economy stagnates, but inflation remains high. I hate the Federal Reserve system because there is no proper tool to fix both issues at the same time. If the Fed tries to adjust interest rates to help with one issue, it will likely exacerbate the other.
Some encouraging news about inflation arrived Wednesday. The report said the inflation measure, which the Fed likes to use, was slower in March.
In the bond market, the Treasury will turn after Thursday’s mixed economic report. Treasury yields fell below 4.13% in 2010 after a worse update than expected on unemployment rates, but then trimmed losses following reports that exceeded expectations on manufacturing. It returned to 4.19% from 4.17% on Wednesday.
In the overseas stock market, trading has been closed in many countries on May Day or International Labor Day holidays.
As many investors expected, Tokyo’s Nikkei 225 rose 1.1% after the Bank of Japan held its benchmark interest rates unchanged.
AP business writers Eurikeyama and Matt Ott contributed.
Original issue: May 1, 2025 9:48am EDT
