U.S. stocks traded higher on Thursday, with the Dow Jones Industrial Average leading the way as investors digested a fresh round of economic data and blockbuster earnings from Big Tech. The blue-chip index climbed more than 500 points, or about 1.3%, while the S&P 500 added roughly 0.4%, signaling resilience after a choppy start to the week.
The tech-heavy Nasdaq Composite recovered from earlier weakness to trade slightly higher, as investors weighed mixed reactions to “Magnificent Seven” results. While some megacap names pulled back, strong earnings and surging AI spending forecasts helped reinforce confidence that the artificial intelligence boom still has room to run.
Market Movers:
- Hertz Global Holdings (+18%) Shares surged after announcing an expanded partnership with Uber Technologies to scale autonomous and driver-led fleet operations. The deal positions Hertz to capitalize on the shift toward shared and robotaxi-based mobility.
- Qualcomm (+14%) Stock jumped after earnings topped expectations, with strength in automotive and IoT helping offset weaker handset demand. Investors are increasingly focused on Qualcomm’s role in AI-enabled devices and next-generation computing markets.
- Eli Lilly (+9%) Shares rallied on a strong earnings beat and raised guidance, driven by continued demand for its blockbuster weight-loss and diabetes drugs. The company’s growth outlook continues to stand out in a volatile market.
- Altria Group (+7%) The stock gained after solid earnings and continued pricing strength in its core tobacco business. Investors also welcomed ongoing share buybacks and stable full-year guidance.
- Alphabet (+5%) Shares advanced following a major earnings beat, with cloud and AI businesses delivering standout growth. The results reinforced confidence in Alphabet’s ability to monetize AI at scale.
- Check Point Software (-17%) Stock dropped sharply despite an earnings beat, as revenue missed expectations and raised concerns about execution. Investors appeared focused on slowing product growth and near-term uncertainty.
- Meta Platforms (-10%) Shares fell even after strong results, as investors reacted to rising capital expenditures tied to AI investments. The market is increasingly sensitive to how quickly those massive spending plans translate into profits.
- Teladoc Health (-6%) Stock slid after issuing weaker-than-expected revenue guidance for the current quarter. Continued declines in its BetterHelp segment weighed on sentiment.
AI Spending Boom Takes Center Stage
A key theme driving markets is the sheer scale of AI investment coming from Big Tech. Combined capital expenditure forecasts from companies like Microsoft, Amazon, Meta Platforms, and Alphabet are now approaching $725 billion this year. That surge in spending is increasingly influencing the broader economy. Recent data shows business investment contributed more to U.S. GDP growth than consumer spending in the first quarter, highlighting how AI infrastructure is becoming a central driver of economic expansion.
Oil Surge and Geopolitics Add Pressure
Markets are also navigating renewed geopolitical tensions, with oil prices climbing sharply amid concerns about escalating conflict involving Iran. Brent crude has surged above $110 per barrel, raising fears of persistent inflation and higher costs across industries. Higher energy prices are complicating the Federal Reserve’s path forward. While policymakers held rates steady, the combination of geopolitical risk and sticky inflation is keeping investors cautious about the timing of any future rate cuts.
Economic Data Sends Mixed Signals
Fresh economic data offered a mixed picture. Inflation remains elevated, with the Fed’s preferred measure showing both headline and core prices continuing to rise, albeit at a slower pace. At the same time, labor market data showed resilience, with jobless claims coming in below expectations. That combination, steady employment alongside stubborn inflation, reinforces the “higher for longer” narrative around interest rates.
Looking Ahead
Markets are heading into a critical stretch, with more earnings on deck and investors closely watching whether AI-driven optimism can outweigh macroeconomic headwinds. Apple’s upcoming results will be another key test for the strength of the Big Tech rally. At the same time, oil prices, geopolitical developments, and central bank signals remain wild cards. If AI spending continues to deliver tangible growth, it could sustain the market’s upward momentum, but any cracks in that narrative may quickly shift sentiment in what is shaping up to be a pivotal period for stocks.