Stock Indexes Edge Higher Ahead of Microsoft and Meta Earnings
Market News 01 May
On Wednesday, U.S. markets clawed back early losses to finish modestly higher: the S&P 500 gained 0.15%, the Dow Jones Industrial Average rose 0.35%, and the Nasdaq 100 added 0.13%. June E-mini S&P futures advanced 0.19% and June E-mini Nasdaq futures climbed 0.21%, signaling investors’ readiness to greet reports from the tech giants with cautious optimism.
Stocks found support when data showed the Fed’s preferred inflation gauge—the core PCE price index—rose at its slowest pace in nine months, while personal spending and pending home sales both beat expectations. Short-covering into the close further boosted indexes into positive territory just before Microsoft and Meta Platforms unveiled their numbers.
Dramatic Economic Signals
Despite the late rally, investors were rattled earlier by stagflation fears: Q1 U.S. GDP contracted 0.3% annualized—the fastest decline in three years—and core PCE inflation for the quarter topped forecasts at +3.5% quarter-over-quarter. Additionally, ADP’s April payrolls came in at just 62,000 new jobs—the smallest increase in nine months—undermining the labor market outlook. Yet benchmark 10-year Treasury yields fell to a three-week low, bolstering hopes for Fed rate cuts ahead.
Corporate Earnings: Winners and Losers
Seagate Technology (STX) jumped 11% after reporting Q1 revenue of $2.16 billion vs. $2.13 billion expected.
Trane Technologies (TT) rallied 8% with adjusted EPS of $2.45 beating the $2.20 consensus.
Super Micro Computer (SMCI) plunged 11% on disappointing preliminary Q3 sales.
Norwegian Cruise Line (NCLH) dropped 7% after it cut its 12-month forward booking outlook.
Qorvo (QRVO) surged 14% on an adjusted EPS of $1.42 vs. $0.99 forecast.
Western Digital (WDC), PPG Industries (PPG), and others saw gains of 4–7% on upbeat guidance and dividend announcements.
Meanwhile, energy stocks fell as WTI crude prices slid to a three-week low—APA, FANG, HAL, and COP all lost 3–4%.
Global Landscape and Bond Markets
China’s April manufacturing PMI dropped to 49.0—the steepest decline in 16 months—clouding the outlook for global growth. In Europe, 10-year German and U.K. bond yields hit one-week and three-week lows, respectively. In the U.S., 10-year Treasury yields fell to 4.13%, supported by dovish labor and inflation signals.
What’s Ahead
Markets will turn their focus to trade talks and tariffs for the rest of the week, plus:
Thursday: April ISM Manufacturing PMI; earnings from Amazon and Apple.
Friday: April nonfarm payrolls (consensus +130,000 vs. ADP’s +62,000), April unemployment rate (4.2%), and average hourly earnings data.
Traders currently assign only an 8% chance of a 25 bp rate cut at the May 6–7 FOMC meeting. Q1 earnings season is in full swing: S&P 500 earnings are forecast to grow 6.7% year-over-year (down from an 11.1% estimate in November), and so far 75% of reporting companies have beaten estimates.