US close: Stocks higher as investors cheer tech earnings
By Iain Gilbert
Date: Thursday 01 May 2025
(Sharecast News) - Major indices closed higher on Thursday as investors cheered quarterly earnings beats from tech giants Meta Platforms and Microsoft.
At the close, the Dow Jones Industrial Average was up 0.21% at 40,752.96, while the S&P 500 advanced 0.86% to 5,617.17 and the Nasdaq Composite saw out the session 1.78% firmer at 17,757.22.
The Dow closed 83.60 points higher on Thursday, extending gains recorded in the previous session despite news that gross domestic product had fallen at an annualised pace of 0.3% in Q1 to mark the first quarter of negative growth since Q122.
Meta Platforms traded higher on the back of stronger-than-expected Q1 revenues, while Microsoft shares were also in the green thanks to top and bottom-line beats in its fiscal Q3, as well as strong results from its Azure cloud business and some upbeat guidance.
Pharmacy chain operator CVS Health hiked its FY profit guidance as its improving Medicare unit helped drive a better-than-expected quarterly showing, while drugmaker Eli Lilly cut its FY earnings guidance on the back of research charges and disappointing weight-loss drug sales, and fast food giant McDonald's missed quarterly sales estimates as it recorded its largest drop in customer numbers since the height of the Covid-19 pandemic.
Also in focus, Tesla shares traded higher after the electric carmaker denied reports that it had opened a search for a new chief executive to replace Elon Musk.
On the macro front, Americans lined up for unemployment benefits at an accelerated pace in the week ended 26 April, according to the Department of Labor. Initial jobless claims rose by 18,000 on a seasonally adjusted basis to 241,000, the highest since February and much higher than expectations for a reading of 224,000. On a non-seasonally adjusted basis, initial claims increased by 12,901 to 223,614, with notable increases in New York and Massachusetts. Outstanding claims rose by 83,000 to 1.91m, the highest since November 2021 and also ahead of market expectations of 1.86m, while the four-week moving average came to 226,000, an increase of 5,500 week-on-week.
Elsewhere, S&P Global's manufacturing PMI was revised down to 50.2 in April, unchanged month-on-month but short of preliminary estimates of 50.7. In terms of inflation, input cost growth eased from March's two-and-a-half-year high, while output prices increased at their fastest rate since 2023.
On another note, the Institute for Supply Management's manufacturing PMI slipped to 48.7 in April, down from 49.0 in March but slightly above market expectations of 48. The reading pointed to a second straight month of contraction in the manufacturing sector, with output dropping from 48.3 to 44.0. The survey also showed that manufacturers were struggling to deal with rising costs and margin pressure amid ongoing trade uncertainty that has disrupted supply chains.
Finally, construction spending shrank by 0.5% month-on-month to $2.19trn in March, according to the Census Bureau, following a downwardly revised 0.6% increase in February and missing consensus estimates of a 0.2% rise. Private sector spending declined by 0.6% in the period, while public spending edged down 0.2%.
Reporting by Iain Gilbert at Sharecast.com
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