An image shows a Wall Street sign alongside American flags in New York City. Bloomberg
Microsoft and Meta stunned markets on Thursday. They posted profits above analyst forecasts. Investors cheered. The stock indexes climbed.
Microsoft saw strong growth. Its cloud computing and AI services drove revenue up 13% from last year. The company’s shares surged 7.6%. Meta also impressed. Its ad revenue rose thanks to new AI tools. Meta’s stock gained 4.2%.
Market Rally Extends
Wall Street kept its winning streak alive. The S&P 500 climbed 0.6%. It marked eight straight days of gains. That streak matches the longest run since August. The Dow Jones Industrial Average rose by 83 points, or 0.2%. The Nasdaq composite jumped 1.5%.
CVS Health, Carrier Global and several others also beat profit estimates. These results helped steady markets. The S&P 500 now sits just 9% below its all-time high. Earlier this year, it fell almost 20% below that mark.
Recession Fears Linger
Many CEOs still worry about a slowdown. They fret over President Trump’s trade tariffs. They fear these taxes could dent company profits. General Motors cut its 2025 profit forecast. GM expects a $4 billion to $5 billion hit from tariffs. It plans to offset at least 30% of that cost. GM shares fell 0.4%.
McDonald’s also disappointed investors. Its quarterly revenue missed forecasts. Its profit barely beat estimates. A key U.S. restaurant sales measure saw its worst drop since 2020. “Consumers are grappling with uncertainty,” CEO Chris Kempczinski said. McDonald’s shares slid 1.9%.
Consumer Caution Grows
Restaurant chains like Chipotle are seeing the same trend. Shoppers watch their budgets closely. Surveys show that people feel uneasy about the economy. They worry about inflation, which remains above ideal levels.
Mixed Economic Signals
On Thursday, two economic reports painted a mixed picture. First, more Americans filed for unemployment benefits than economists expected. This suggested some weakness in the job market. Later, a report showed U.S. factories performed better last month than feared. Yet manufacturing still contracted.
Investors fear “stagflation.” That happens when growth stalls but inflation stays high. The Federal Reserve can’t easily fix both issues at once.
Treasury Yields Swing
Bond traders reacted to the reports. The 10-year Treasury yield fell below 4.13% at first. Then it rebounded to 4.21%. That level rose from 4.17% late Wednesday.
Closing Numbers
By end of trading, the S&P 500 gained 35.08 points to 5,604.14. The Dow added 83.60 points to 40,752.96. The Nasdaq climbed 264.40 points to 17,710.74.
Global Markets
Many markets stayed closed for May Day. Tokyo’s Nikkei 225 rose 1.1% after Japan kept interest rates steady. Hopes that trade talks might ease U.S. tariffs also buoyed trading. A Chinese state media blog said Washington seeks talks with China on those tariffs.
