It was another remarkable week for the stock market, thanks to strong earnings reports for the first quarter and rising oil prices linked to ongoing conflicts. Investors also processed a variety of economic data alongside the Federal Reserve’s recent interest rate decisions. In the past five sessions, the S&P 500 and Nasdaq Composite increased by 0.9% and 1.1%, respectively, both closing at record highs on three occasions—Monday, Thursday, and Friday. Thursday also marked the final trading day of April, celebrated as the best month for both indexes since 2020. This marks the fifth consecutive week of gains. The Dow Jones Industrial Average rose by 0.55% for the week, but notably, all those gains were made on Thursday, as the other four days experienced losses. It’s uncertain if this upward trend can continue next week, as a broader range of companies will be reporting earnings, which may lead to some disappointments.
So, here are three key points from this week’s trading activities:
First, rising oil prices didn’t deter investors from buying stocks. The situation in the Middle East led to increased oil prices, and although there was initial concern, it didn’t have the same effect as it did in March. On Monday, both the international benchmark Brent and the U.S. standard West Texas Intermediate climbed after news broke that President Trump abandoned plans to negotiate a ceasefire with Iran. Both the S&P 500 and Nasdaq managed to hit record highs that day. Thursday witnessed Brent prices climb to a four-year peak, influenced by reports of potential military briefings regarding Iran, yet both indexes still reached their second record closing of the week.
Next, despite strong corporate profits, stock reactions were mixed. Big names like Meta Platforms, Microsoft, Alphabet, and Amazon released their results one night, dominating the news. While all showed growth in sales and profits, stock market reactions varied. Microsoft’s quarterly results raised questions about the sustainability of its business model, resulting in a nearly 4% drop in shares following the announcement. Financial analyst Jim Cramer suggested it might not be wise to buy the dip, given the challenges ahead, although Microsoft saw a 1.6% recovery the following day, mainly due to a strong Azure forecast.
On a brighter note, Amazon’s stock increased by 0.8% despite showing impressive operational results. The e-commerce giant achieved its highest operating margin across segments and recorded a significant growth rate in its cloud computing unit. Analysts have raised their price target for Amazon stock to $300. In contrast, Meta’s stock plummeted by 8.55% after the company raised its capital spending outlook, leading many to question its spending priorities, especially in generative AI.
Lastly, Alphabet (Google’s parent company) excelled in a way Meta could not, demonstrating the profitability of its generative AI investments with nearly a 10% stock increase following its earnings report. Google Cloud’s revenue surged by 63%, and the operating profit tripled, which enhanced its market position, leading to a raised price target.
Apple reported its earnings on Thursday night, showing strong results as well, pushing its shares up over 3% the following day, nearing its all-time high.
In other news, last week also included new insights from the Fed and consumer-focused companies like Visa and Mastercard, which painted a robust picture of the U.S. economy amid ongoing uncertainties from international conflicts. The Fed decided to keep interest rates steady, a decision widely anticipated. Fed Chairman Jerome Powell expressed optimism about strong economic growth, attributing some of it to resilient consumer spending.
Visa reported impressive quarterly results, beating expectations and suggesting strong U.S. payment volumes. Similarly, Mastercard’s CEO echoed this sentiment about healthy consumer and corporate spending trends. Additionally, jobless claims fell to the lowest levels since 1969, while GDP growth for the first quarter was recorded at a 2% annual rate, lower than expectations but still a positive sign compared to previous quarters.
