Stocks rose higher on Thursday as big tech earnings uplifted the broader market, which has been marred by growing concerns about the potential impacts of President Donald Trump's tariff policies. The S&P 500 Index and tech-heavy Nasdaq Composite each advanced about 0.6% and 1.5%, while the Dow Jones Industrial Average climbed over 80 points.
Here's how the market settled on Thursday:
S&P 500 Index
Dow Jones Industrial Average
Nasdaq Composite Index
Strong earnings reports from Microsoft
Microsoft's fiscal third-quarter earnings showed better-than-expected cloud performance, with its commercial cloud unit's revenue rising 20% annually to $42.2 billion. The company's productivity and business processes segments also topped estimates with a quarter revenue of $29.9 billion and its Intelligent Cloud and Azure revenue reaching $26.8 billion -- AI added 16 points of growth to Azure's revenue as Microsoft bought more servers online to meet growing demand.
Meta's first-quarter results also demonstrated a stronger-than-expected advertising market despite worries businesses may suspend ad spending due to the uncertain macroeconomic environment. The social media giant's advertising revenue beat expectations at $41.39 billion for the quarter and Meta said it anticipates second-quarter ad revenues between $42.5 billion and $45.5 billion, coming ahead of analyst estimates for $44 billion at the top-end.
Outside of big tech, however, consumer spending bellwether McDonald's
U.S. same-store sales dropped by 3.6% during the quarter, with Kempczinski highlighting that traffic from low-income and middle-income consumers fell "nearly double digits" over the previous quarter while high-income visits "remained solid."
Kempczinski said the U.S. traffic results showed "the divided U.S. economy where low- and middle-income consumers are being particularly weighed down by the cumulative impact of inflation and heightened anxiety about the economic outlook."
Elsewhere, U.S. Manufacturing Activity contracted further in April, the Institute for Supply Management (ISM) reported Thursday, as Trump's tariff policies begin to show material impact on businesses. The ISM's headline manufacturing purchasing managers' index (PMI) fell to a reading of 48.7 last month from the previous monthly print of 49 -- readings below the neutral level of 50 indicate contraction.
"In April, U.S. manufacturing activity slipped marginally further into contraction after expanding only marginally in February," said Timothy Fiore, chair of the ISM, in a statement. "Demand and output weakened while input strengthened further, conditions that are not considered positive for economic growth."
Initial Unemployment Claims also unexpectedly jumped last week, the Labor Department reported Thursday, offering another warning sign for the health of the U.S. economy. First-time filing totaled a seasonally adjusted 241,000 for the week ended April 26, rising 18,000 over the previous week. Continuing claims, which provide a broader view of labor turnover trends, rose to 1.92 million to mark its highest level since November 2021.
Layoffs notably declined in April as Elon Musk's Department of Government Efficiency (DOGE) cut less federal workers month-over-month, according to a report from outplacement firm Challenger, Gray & Christmas on Thursday. Planned job cuts totaled 105,441 for the month, down 62% but still represented the highest total for the month since the onset of the coronavirus pandemic. DOGE cuts accounted for about 2,700 losses, bringing the department's annual total to 281,452 from 216,215 in March.
The report comes ahead of the Labor Department's "official" jobs report for April, which is expected to show 133,000 nonfarm payrolls additions.
Thursday ushered in a new trading month for Wall Street, as investors closed out a historically volatile month of April that saw the S&P 500 briefly fall into a bear market following the announcement of Trump's so-called "reciprocal" tariff policies on April 2. The broader market index has regained some of its losses throughout the month, and is now about 9% of its February record high.
In the News:
General Motors
The Detroit-automaker expects annual adjusted core profit of between $10 billion and $12.5 billion, including a tariff exposure of between $4 billion and $5 billion at their current rates. It's previous guidance, issued before Trump's tariff policies, called for earnings before interest and taxes between $13.7 billion and $15.7 billion. GM also anticipated its annual net income to range between $8.2 billion and $10.1 billion, compared to its prior range of $11.2 billion and $12.5 billion.
"Since the election, our manufacturing and supply chain teams have been focused on developing strategies to help mitigate the impact of potential tariffs," CFO Paul Jacobson told analysts during the company's earnings call on Thursday, adding that the company plans to "take additional mitigation measures, including cost reduction targets, where it makes sense to do so."
Looking Ahead:
All eyes will be on the Labor Department's jobs report for April, as well as another round of big tech earnings from Apple
