Dow rallies 400 points to kick off May as Microsoft, Meta rekindle AI trade: Live updates – CNBC
2025-05-01T13:53:00Z
Quarterly results from Microsoft and Meta Platforms surpassed analyst estimates.
Traders work on the floor of the New York Stock Exchange on May 1, 2025.
Stocks rose on Thursday after strong quarterly results from two Big Tech players 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, still slightly below its levels from before President Donald Trump’s “Liberation Day” tariffs announcement in early April. The Nasdaq Composite increased 1.52%, to close at 17,710.74 and wipe out the decline it experienced since April 2.
Investor fears that Trump’s tariffs and a downturn in the U.S. economy would threaten the AI trade were assuaged after Meta Platforms posted stronger-than-expected revenue in the first quarter, with Meta’s Chief Executive Mark Zuckerberg saying on an earnings call Wednesday that the business is “well positioned to navigate the macroeconomic uncertainty.”
Microsoft also reported top- and bottom-line beats in the fiscal third quarter. The company’s executives said during an earnings call Wednesday that they expect capital expenditures to rise from here as they continue to expand data center capacity, remarking that “cloud and AI are the essential inputs for every business to expand output, reduce costs and accelerate growth.”
Those results sent Microsoft shares up 7.6%, while Meta shares advanced 4.2%. Information technology far outperformed the other 10 sectors in the S&P 500, up more than 2%.
“Few stocks are truly immune to Trump tariffs [and] trade war, but AI is a lot 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.”
Softening economic data
Weekly jobless claims increased 241,000, topping the Dow Jones estimate of 225,000 and keeping Thursday’s bullishness in check. That result stoked economic concerns after a disappointing gross domestic product report for the first quarter. The unemployment data also raises the stakes for April’s nonfarm payrolls reading on Friday.
In the previous session on Wednesday, the S&P 500 and the 30-stock Dow posted gains in volatile trading, coming back from earlier losses. At the day’s lows, the broad market index was down more than 2%, while the blue-chip Dow lost more than 780 points.
Traders were initially shaken by weak economic data from the Commerce Department, showing that GDP fell at an annualized pace of 0.3%. It marked the first quarter of negative growth since Q1 of 2022. Economists polled by Dow Jones had forecast a 0.4% gain.
Wednesday marked the final trading day in April, in which stocks were first whipsawed after Trump’s “reciprocal” tariff announcement on April 2 and the subsequent suspension of the highest levies. At one point during the month, the S&P 500 briefly slipped into a bear market – falling more than 20% from its February record high – before recapturing some of its losses. The broad market index wound up ending Wednesday about 9% off its record close.
Still, the comeback couldn’t save S&P 500 and the Dow from a losing April, as they slipped about 0.8% and 3.2%, respectively. The Nasdaq Composite , however, advanced 0.9% in the period.
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