US Stocks Rally Amidst Tech Earnings and Apple Anticipation
US stocks gained momentum on Thursday afternoon as investors analyzed earnings from tech giants and awaited Apple's results for further insights into the outlook for major technology companies. The S&P 500 (^GSPC) surged 0.5%, while the Dow Jones Industrial Average (^DJI) rose approximately 0.4%. The Nasdaq Composite (^IXIC) gained nearly 0.3%.
Trump's Tariff Threat Triggers Market Fluctuations
In the final hour of trading, President Donald Trump once again hinted at imposing 25% tariffs on Mexico and Canada. The US dollar (DX=F) index rose sharply on the news, reversing earlier losses to settle near flat.
Earning Season Continues
After the Federal Reserve kept interest rates unchanged, investors turned their attention to earnings reports. Tesla's (TSLA) shares edged higher despite missing earnings estimates as investors trusted its promise to resume growth in 2025. Meta's (META) earnings beat helped lift its shares, while Microsoft's stock slumped by 6% after its cloud revenue fell short.
AI Investments Under Scrutiny
The faith in Big Tech was tested after DeepSeek's cheaper AI model challenged assumptions about the likelihood of a pay-off, leading to questions about the rationale for their massive AI investments.
Economic Indicators and Corporate News
The Bureau of Economic Analysis's preliminary estimate of fourth-quarter gross domestic product (GDP) revealed a 2.3% annualized growth in the US economy, lower than the expected 2.6%. Additionally, American Airlines (AAL) CEO Robert Isom expressed condolences following a collision between an American passenger jet and a US army helicopter on Wednesday night.
Apple Results Anticipated
After the closing bell, Apple (AAPL) reported its fiscal first quarter earnings, surpassing expectations on both the top and bottom lines but falling short on iPhone revenue. Shares declined about 1% following the report.