US close: Alphabet results, trade newsflow lifts stocks
By Benjamin Chiou
Date: Friday 25 Apr 2025
(Sharecast News) - US stocks logged their fourth day in positive territory as investors focused on improving newsflow regarding tariffs and shrugged off some gloomy consumer confidence data.
The Dow edged 0.1% higher, while the S&P 500 gained 0.7% and the Nasdaq jumped 1.3%; over the past week alone, the indices have risen 4.0%, 6,4% and 9.2% respectively, with the latter supported by forecast-beating results from tech giant Alphabet.
"The large move in the Nasdaq is a reflection of the outsized selloff in the tech giants, particularly the 'Magnificent Seven', since earlier this year," explained David Morrison, senior market analyst at Trade Nation.
"While all of the 'Mag 7' constituents have bounced significantly off the lows which followed President Trump's reciprocal tariff announcement at the beginning of this month, they are still registering big losses since February."
On the macro front, the University of Michigan's consumer sentiment index was revised higher to 52.2 in April, up from a preliminary reading of 50.8 but down from 57 in March. Despite the upward revision, consumer sentiment was down for a fourth straight month to the lowest reading since July 2022. The expectations gauge plummeted to 47.3, while year-ahead inflation expectations jumped to 6.5%, the highest reading since 1981, while long-run inflation expectations climbed to 4.4%.
Tariff seesaw continues
Rumours that China is considering suspending its 125% retaliatory tariffs on select US imports sparked gains early on, raising hopes that the two nations could come to a deal, while US-Japan trade talks were said to be promising.
However, reports from Xinhua News Agency on Friday suggested that China was preparing contingency plans - such as monetary and policy tools to boost the economy amid the deepening trade war - as Beijing continues to dismiss US reports that the two sides were closing in on a trade deal.
Investors were also digesting comments from Donald Trump who told Time Magazine that he would consider it a "total victory" if America had elevated tariffs of 20-50% on foreign countries a year from now. Trump also denied that rising yields had forced him to put a 90-day pause on the majority of his higher tariff rates and stated that announcements regarding many trade deals would be coming "over the next three to four weeks".
"The chances are that tariffs on China are cut from their current more than 100% effective rate, but there is no clear timeline," said Michael Pearce, deputy chief US economist at Oxford Economics. "We prefer to focus on tariff actions rather than speculation; the next decision point on trade policy will be whether the administration delays, or waters down the auto parts tariffs, due to take effect next week."
Market movers
Google-parent Alphabet was trading 2% higher after it posted a beat on both the top and bottom lines in the first quarter, fuelled by its core search and advertising business. Consolidated revenues were 12% higher than last year at $90.2bn, ahead of the $89.12bn expected by analysts, while operating income comfortably beat Wall Street estimates for $28.7bn, up 20% at $30.6bn.
Intel shares dropped 7% after the computer components giant beat estimates but issued disappointing guidance. As it announced plans to cut both operational and capital expenses, the company pointed to revenues for the second quarter of $11.8bn, around $1bn shy of the current consensus forecast.
EV group Tesla gained 10% as investors hunted for a bargain following a dismal performance from the stock so far this year - down 30% year-to-date even after Friday's surge.
Colgate-Palmolive rose despite a mixed earnings report, as it beat analysts' forecasts with quarterly profits and simultaneously lowered its full-year outlook. The household and consumer products giant cut its growth forecasts for 2025 profits from a mid-single-digit to a low-single-digit percentage.
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