Big Tech Earnings Propel Nasdaq and S&P Rally Amid Trade War Thaw
The Nasdaq Composite jumped 1.52% to 17,710.74, led by Microsoft (MSFT) vaulting 7.63% to 425.40 and Meta (META) climbing 4.23% to 572.21, as both giants outstripped Street forecasts for AI-driven cloud and ad revenue. The S&P 500 rose 0.63% to 5,604.14 and the Dow Jones added 0.21% to 40,085.27, marking an eighth straight day of gains for the blue-chips. Investors breathed easier after White House signals of renewed U.S.-China trade talks and signs that early “reciprocal” tariff threats will not be fully implemented, lifting sentiment across high-beta names and defensive staples alike.
Technology Titans Affirm AI Spend While Guidance Splits Amazon and Apple
Microsoft’s results confirmed $80 billion of AI data-center investments, sending its share price sharply higher. Meta raised its 2025 cap-ex outlook to $64–72 billion, bolstering NVIDIA (NVDA) up 2.47% to 111.61 and AMD (AMD) +1.30% to 96.65 on optimism for GPU demand. Apple (AAPL) delivered better-than-expected iPhone revenue, closing at 213.32 (+0.39%), yet fell 3.78% in after-hours to 205.25 on $900 million of new tariff costs. Amazon (AMZN) beat Q1 sales at 155.7 billion but guided lighter Q2 operating income, lifting shares 3.13% to 190.20 then sliding 3.21% to 184.10 after hours.
Tariff-Hit Industrials and Auto Makers Adjust Guidance Under Policy Overhang
General Motors (GM) trimmed 2025 EBIT to $10–12.5 billion, citing up to $5 billion in tariff costs, yet shares edged up 0.33% to 45.20 after hours. Qualcomm (QCOM) warned of “trade uncertainty” and forecast $10.3 billion in Q3 revenue, sending its stock down 8.92% to 135.21. Tesla (TSLA) slipped 0.58% to 280.52 as governance rumors surfaced, though the board’s denial of a CEO search offered scant relief.
Consumer Facing Squeeze as Food Chains and Retailers Report Traffic Declines
McDonald’s (MCD) fell 1.88% to 313.64 after Q1 comparable sales slumped 3.6% in the U.S., the weakest result since 2021, blamed on “grappling with uncertainty.” Chipotle (CMG) dipped 0.40% to 50.32 while Starbucks (SBUX) shares traded near 133.50 as all three chains noted consumer retrenchment. Kohl’s (KSS) soared 7.61% to 7.21 after ousting its CEO for undisclosed vendor conflicts, a governance victory in a turbulent retail backdrop.
Health and Pharma Stocks Clash Over GLP-1 Turf Wars
Eli Lilly (LLY) plunged 11.66% to 794.10 despite beating Q1 earnings, after CVS (CVS) announced preferred status for Novo Nordisk’s Wegovy over Lilly’s Zepbound. Novo Nordisk (NVO) rose 0.20% to 65.73 in after-hours, underscoring intensifying formulary competition.
Fixed Income and Labor Metrics Crackle Under Economic Slowdown Signals
US 10-year Treasuries held near 4.17% as weekly jobless claims surged to 241,000, the highest since February, and continuing claims hit 1.916 million, echoing a contracting Q1 GDP at -0.3%. Mortgage rates eased slightly—30-year at 6.76%—as bond markets stabilized ahead of Friday’s payrolls report.
Semiconductors and AI Supply Chain Feel the Pulse of Mega-Spenders
NVIDIA’s supplier Micron (MU) climbed 2.73% to 73.40, while Broadcom (AVGO) added 2.44% to 821.50 on confirmation that Meta and Microsoft remain committed to AI infrastructure. This cast a bullish filter on chipmakers even as trade risks loom.
Market Crossroads: Hold Defensive Quality or Chase Growth Rebound?
With volatility spiking in consumer discretionary and industrials but AI leaders and financials (banks up ~1.2%) holding firm, rotational dynamics favor a cautious stance. Growth multiples remain lofty—S&P 500 trades at ~19x forward P/E—while tariff uncertainty and labor weakness argue for quality across secular AI and healthcare growth themes. On balance, maintaining core positions in MSFT, META, NVDA and defensive pivots in CVS and GM seems prudent, while lightening exposure to QCOM and LLY until tariff clarity emerges. Market signals point to a Hold rating, with opportunistic Add on selective dips into leading AI and cloud names.
