Microsoft and Meta’s strong quarterly results eased concerns that artificial intelligence progress would slow amid economic turmoil. The Dow Jones Industrial Average climbed 83.60 points, or 0.21%, to close at 40,752.96. The S&P 500 gained 0.63% to end at 5,604.14, and the Nasdaq Composite increased 1.52%, closing at 17,710.74.
Meta’s Chief Executive Mark Zuckerberg said on an earnings call Wednesday that the business is “well positioned to navigate the macroeconomic uncertainty.” Microsoft’s executives also reported robust results in their fiscal third quarter, noting their commitment to expanding data center capacity. Microsoft shares surged 7.6%, while Meta shares advanced 4.2%. “Few stocks are truly immune to trade war impacts, but AI is less impacted than investors currently believe,” said Jed Ellerbroek, portfolio manager at Argent Capital Management.
“We’re early in a very steep growth curve right now, and that goes for AI infrastructure.”
Despite some economic data softening, with initial jobless claims increasing to 241,000, investor sentiment remained bullish. The slight uptick stoked concerns following a disappointing gross domestic product report for the first quarter. Kohl’s announced on Thursday that it fired CEO Ashley Buchanan following an investigation that found he advocated for deals with a vendor with whom he had a personal relationship.
The company stated that Buchanan engaged in transactions on “highly unusual terms.”
Wall Street is closely watching earnings due after Thursday’s close.
Meta and Microsoft’s quarterly performance
Analysts are particularly focused on Apple’s sales and earnings, given the potential impact of U.S.-China trade tensions on the company.
Amazon’s retail business and investments in AI are also under scrutiny. Shares of Eli Lilly tumbled nearly 11% on Thursday following unexpected charges related to a cancer treatment deal. The stock is on pace to end the week 9% lower.
CFRA Research’s Sam Stovall believes that the worst might be behind the market. “We retested the 5,500 level on the S&P 500,” Stovall noted, suggesting a potential recovery. Investors are shifting from resilient sectors like consumer staples to those that were more severely beaten down, such as communication services and technology.
UBS suggests that fear might lead to market outperformance. Historically, low investor expectations have coincided with higher-than-average returns over subsequent months. However, Piper Sandler cautions against getting hopes up regarding new trade agreements.
They believe actual deals are unlikely, predicting ongoing discussions and the persistence of existing tariffs.
