Traders work on the floor of the New York Stock Exchange on May 1, 2025.
NYSE
Stocks rose on Thursday after strong quarterly results from two Big Tech players eased concerns that artificial intelligence progress would slow amid economic turmoil.
The Dow Jones Industrial Average climbed 210 points, or 0.5%. The S&P 500 traded up about 1%, while the Nasdaq Composite increased nearly 2%.
Investor fears that President Donald Trump’s tariffs and a downturn in the U.S. economy would threaten the AI trade were assuaged after Meta Platforms posted stronger-than-expected revenue in the first quarter, with Meta’s Chief Executive Mark Zuckerberg saying on an earnings call Wednesday that the business is “performing very well” and that it’s “well positioned to navigate the macroeconomic uncertainty.”
Microsoft also reported top- and bottom-line beats in the fiscal third quarter as well as strong results from its Azure cloud business. On top of that, the company offered upbeat guidance, further alleviating some concerns about tech companies’ future performance. The company’s executives said during an earnings call Wednesday that they expect capital expenditures to gain from here as they continue to expand data center capacity, adding that “cloud and AI are the essential inputs for every business to expand output, reduce costs and accelerate growth.”
Those results sent shares up 8%, while Meta shares advanced about 4%. Other names like AI chip darling Nvidia also moved higher by 4%, and information technology outpaced the rest of the S&P 500 sectors, seeing a 3% incline.
“Few stocks are truly immune to Trump tariffs [and] trade war, but AI is a lot less impacted than investors currently believe,” said Jed Ellerbroek, portfolio manager at Argent Capital Management. “We’re early in a very steep growth curve right now, and that goes for AI infrastructure.”
Denting Thursday’s bullishness somewhat was a jump in weekly jobless claims to 241,000, more than the the Dow Jones estimate of 225,000. That jump exacerbated further concerns about the economy after the weak first-quarter gross-domestic-product report earlier in the week and raises the stakes for April’s nonfarm payrolls reading on Friday.
In the previous session on Wednesday, the S&P 500 and the 30-stock Dow posted gains in volatile trading, coming back from earlier losses. At the day’s lows, the broad market index was down more than 2%, while the blue-chip Dow lost more than 780 points.
Traders were initially shaken by weak economic data from the Commerce Department, showing that GDP fell at an annualized pace of 0.3%. It marked the first quarter of negative growth since Q1 of 2022. Economists polled by Dow Jones had forecast a 0.4% gain. Investors looked past the dismal results and began buying back into the market late in the session, resulting in a rebound into positive territory for the Dow and S&P 500.
Wednesday marked the final trading day in April, in which stocks were first whipsawed after President Donald Trump’s “reciprocal” tariff announcement on April 2 and the subsequent suspension of the highest levies. At one point, during the month, the S&P 500 briefly slipped into a bear market – falling more than 20% from its February record high – before recapturing some of its losses. The broad market index wound up ending Wednesday about 9% off its record close.
Still, the comeback couldn’t save S&P 500 and the Dow from a losing April, as they slipped about 0.8% and 3.2%, respectively. The Nasdaq Composite, however, advanced 0.9% in the period.