U.S. stocks surged Thursday, with the Nasdaq Composite leading gains after strong earnings from Microsoft and Meta eased concerns about Big Tech’s resilience amid growing trade tensions.
As of early afternoon trading, the Nasdaq Composite (^IXIC) jumped over 2.2%, while the S&P 500 (^GSPC) climbed 1.4%. The Dow Jones Industrial Average (^DJI) advanced about 0.7%, or more than 300 points, extending its longest winning streak of the year.
Markets appeared strengthened by optimism that AI and cloud infrastructure spending is staying steady despite President Trump’s aggressive tariff policy. Strong tech results also helped offset concerns around a weakening labor market and a slowdown in manufacturing activity.
Market Movers:
- Microsoft (MSFT) +8.5%: Microsoft blew past earnings expectations, powered by robust growth in its cloud and AI businesses. The results quelled investor fears that tariffs would derail corporate AI spending, sparking one of the stock’s strongest single-day performances this year.
- Meta (META) +4.5%: Meta shares soared after the company reported strong advertising revenue and affirmed its AI infrastructure spending plans. The upbeat tone from executives helped stabilize sentiment around Big Tech amid political uncertainty.
- Nvidia (NVDA) +4.2%: Nvidia surged after Microsoft and Meta both reiterated plans to invest billions in AI, reinforcing demand for Nvidia’s high-performance GPUs. The rally was seen as a vote of confidence in the continued AI arms race.
- Qualcomm (QCOM) -8%: Qualcomm tumbled after issuing a slightly weaker-than-expected revenue outlook, citing uncertainty tied to Trump’s tariffs. While the company beat expectations for the March quarter, concerns around demand in China and smartphone upgrades weighed heavily on the stock.
- McDonald’s (MCD) -1.4%: The fast-food giant missed earnings expectations and reported weaker U.S. sales, blaming consumer anxiety fueled by the volatile trade environment. Its CEO highlighted “uncertainty” as a major drag on spending.
Trade Jitters Begin to Cool
Despite public rhetoric suggesting Beijing must act first, markets took some comfort in reports that the U.S. has quietly approached China to restart trade talks. This softening tone helped ease fears that prolonged tariffs could tip the U.S. into recession. Investors are also anticipating that the Trump administration may soon roll out partial trade deals, adding a note of cautious optimism.
Still, the damage from the tariff war is beginning to surface. McDonald’s cited direct consumer impact, while Qualcomm explicitly pointed to the trade environment as a headwind to future growth. Meanwhile, Apple and Amazon—both reporting after the bell—remain under pressure to prove they can navigate the geopolitical storm.
Labor Market Weakness Looms
Fresh data Thursday showed unemployment claims rose to a two-month high, with continuing claims reaching levels not seen since 2021. While not a red alert, the numbers suggest the labor market may be losing some steam—a trend closely watched by the Fed.
Adding to the cautionary tone, the ISM Manufacturing Index came in at 48.7, indicating contraction in the sector for another month. While slightly better than expected, the data confirmed that manufacturing remains under pressure, particularly in the face of disrupted supply chains and reduced global demand.
Looking Ahead
All eyes now turn to Apple and Amazon, set to report earnings after Thursday’s close. Their updates could either reinforce or undermine the positive momentum sparked by Microsoft and Meta. Meanwhile, Friday’s jobs report will offer a crucial read on whether labor market weakness is temporary—or a sign of deeper economic trouble. As May kicks off, investors are treading a delicate line between optimism about Big Tech’s durability and broader macroeconomic concerns that could weigh on growth.