U.S. Market Overview
U.S. stock markets ended Thursday with significant gains, marking the third consecutive day of strong performance for the S&P 500, which climbed over 1.5% again. Technology stocks led the rally, with the Nasdaq Composite jumping by 2.7% and the Dow Jones Industrial Average advancing 1.2%.
This upward movement was underpinned by positive economic indicators, including stronger-than-expected durable goods orders for March and a decline in jobless claims, suggesting continued labor market resilience. Market sentiment received an additional boost from signs that the U.S. could be looking to de-escalate trade tensions with China, though no official details have been confirmed.
Despite the rally, concerns remain over U.S. trade policy, particularly around potential tariff reductions and President Trump’s earlier remarks targeting Federal Reserve Chair Jerome Powell. While investor caution persists, the underlying fundamentals are relatively strong. Analysts project 7% earnings growth for the S&P 500 in Q1. Though economic growth appears to be slowing, there are no immediate indicators of a recession. The combination of a stable labor market and solid earnings adds a degree of optimism, though trade negotiations may continue to inject volatility into markets.
Asia-Pacific and European Market Performance
Asian Equities Rise
On Friday, most Asian stock markets posted gains, led by Japan’s Nikkei 225, which benefited from optimism around U.S.-China trade talks and Alphabet’s robust earnings report. Other tech-heavy indices such as Hong Kong’s Hang Seng and South Korea’s KOSPI also moved higher.
In contrast, Chinese equities lagged, reflecting growing concerns about the long-term implications of the trade war and mixed messages from trade negotiations.
U.S. Futures and Earnings Momentum
Overnight, U.S. equity futures rose, driven by strong quarterly earnings from Alphabet, which helped spark a rally across tech names like Nvidia, Tesla, Meta, and Amazon. Investor sentiment was further buoyed by speculation about a potential Federal Reserve rate cut, although conflicting signals from the Trump administration continued to cloud the broader trade outlook.
European Stocks Close in the Green
European stock markets also saw gains on Thursday. The pan-European STOXX 600 index rose 0.4%, driven by strong performances in automotive and materials sectors. Among the notable movers:
- Renault surged 4.4%
- BNP Paribas and Nokia dragged on performance, with Nokia falling 9.4% after missing earnings estimates
Currency and Commodity Highlights
The U.S. dollar edged higher on Friday following a volatile week marked by President Trump’s fluctuating remarks on trade and Fed policy. Despite early optimism surrounding trade discussions with Japan and South Korea, investor uncertainty around U.S.-China trade talks limited gains. The dollar index is set to end the week 0.27% higher, breaking a four-week losing streak. The EUR/USD traded at 1.1341.
Oil prices posted slight gains on Friday but remained on track for weekly losses, dampened by expectations of increased supply from OPEC+ and continued uncertainty over U.S.-China trade policy. However, geopolitical tensions-especially around the Ukraine conflict-offered some price support due to concerns about energy market disruptions.
Trade Negotiation Updates
President Trump stated that trade discussions with China were ongoing, though no further details were provided. In response, China’s Foreign Ministry spokesman Guo Jiakun denied that any talks were currently taking place. The Chinese Commerce Ministry called on the U.S. to remove all unilateral tariffs and demonstrate sincerity before a deal could be considered.
Federal Reserve officials, including Cleveland President Beth Hammack and Governor Christopher Waller, indicated that interest rate cuts could be on the table if tariffs negatively impact economic indicators-especially the labor market. This stance diverges from Fed Chair Jerome Powell, who has preferred a wait-and-see approach, drawing criticism from President Trump.
Stock-Specific Developments
Technology and Telecom
- Alphabet surpassed expectations with $2.81 earnings per share and $90.23 billion in revenue, driven by strong performance in advertising and cloud services. The company announced a $70 billion share buyback and reaffirmed its ambitious AI roadmap.
- Intel gave a cautious Q2 forecast, anticipating a 12% YoY revenue decline, citing tariff impacts, supply chain issues, and economic uncertainty. Q1 results beat expectations, and the company emphasized cost-cutting and AI development as long-term priorities.
- T-Mobile added 495,000 new monthly subscribers in Q1 2025, falling short of the 506,400 expected by analysts. Shares dropped over 5% in after-hours trading, though the firm reaffirmed its annual growth targets and raised its adjusted EBITDA forecast.
Consumer and Industrial Goods
- Procter & Gamble will increase product prices to manage higher costs from tariffs and revised its annual outlook downward. The company warned that tariffs, including a 145% duty on Chinese imports, could add $1.5 billion in annual expenses.
- Freeport-McMoRan slightly beat Q1 profit expectations but warned of a 5% increase in U.S. mine material costs due to proposed tariffs. Despite a 20% drop in copper output, higher prices and strong demand from the U.S. and China helped offset losses. Copper prices rose 10.7% during the quarter.
- Vale reported a 17% decline in Q1 net profit to $1.39 billion, missing estimates due to lower iron ore prices. Net revenue slipped 4%, although improved cost management and a stronger Brazilian real offered some relief.
Healthcare and Beverages
- Bristol Myers Squibb reported higher-than-expected Q1 revenue, thanks to strong demand for cancer treatments like Opdivo and Yervoy, and lifted its full-year guidance despite trade-related cost concerns.
- PepsiCo missed its quarterly profit target for the first time in five years, lowering its full-year profit forecast. The company cited rising supply chain costs, weak consumer spending, and tariff uncertainty as primary factors.
- Skechers withdrew its 2025 outlook and saw its stock fall 6.7% after hours. The firm posted 7.1% Q1 sales growth, below projections, with China sales down 16%, citing strategic challenges amid ongoing trade turbulence.
Technology and Financial Institutions
- IBM shares slid nearly 7% after suspending 15 government contracts, costing about $100 million. Consulting revenue declined 2% due to economic uncertainty, and while the software unit showed modest gains, it fell short of expectations. The company reaffirmed its 2025 targets despite macro headwinds.
- Mobileye Global surprised with a 7% revenue growth forecast for Q2, avoiding direct tariff impacts due to its simple supply chain. However, it warned of risks tied to vehicle production and consumer demand shifts.
- BNP Paribas reported mixed Q1 results. While its investment banking division performed well, rising costs and declining retail business dragged earnings, with shares falling 2.2%. CEO Jean-Laurent Bonnafe expressed confidence in leveraging opportunities from the current trade slowdown.
Automotive and Transportation
- Saint-Gobain posted a 3.2% Q1 sales increase to €11.7 billion, supported by higher volumes and acquisitions. Despite a 0.3% like-for-like decline, the firm forecasts a second-half recovery in European construction and expects an operating margin above 11% for 2025. Growth was particularly strong in Northern Europe and Latin America.
- Carrefour reported 2.9% like-for-like Q1 sales growth, boosted by strong performance in Brazil and recovery in France through price cuts. The retailer reaffirmed its 2025 guidance and highlighted its ongoing cost-saving plan to support continued price reductions.
- Renault saw a 0.6% rise in Q1 revenue to €11.68 billion, led by new models like the Renault 5 EV and Duster SUV. EVs now make up 13% of total sales. Exchange rates and dealer inventory issues posed challenges.
- American Airlines withdrew its 2025 financial forecast, citing macroeconomic and trade-related challenges. Q1 loss was smaller than expected, but Q2 profit guidance fell short of analyst predictions.
M&A, Analyst Ratings, and Strategic Deals
- Air India is negotiating with Boeing to acquire about 10 737 MAX jets, originally meant for Chinese clients, who rejected deliveries due to trade tensions. This move may accelerate Air India’s expansion despite earlier delays.
- Uber surged over 5% after revealing a partnership with Volkswagen to launch fully autonomous ID. Buzz AD electric vans starting in Los Angeles, with commercial rollout planned for 2026 and broader U.S. expansion to follow.
- Banco BPM rejected a €13 billion takeover offer from UniCredit, calling it undervalued and unfair. Regulatory hurdles and Italian government involvement have complicated the deal.
- Morgan Stanley reduced its ASML price target from €680 to €640, citing weaker Q1 orders, tariff risks, and AI-related demand uncertainties.
- Bank of America cut its Apple price target to $240, noting AI launch delays and increased supply costs. Despite downward revisions for FY2026, the bank maintained its Buy rating.
Key Data and Events Ahead
Markets will be watching for today’s release of the University of Michigan’s Consumer Sentiment Index and the Baker Hughes rig count. These indicators, along with earnings from AbbVie, Colgate-Palmolive, and HCA Healthcare, may further shape investor sentiment.
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