The U.S. stock market experienced a significant boost on Wednesday as futures rose sharply following impressive earnings reports from technology giants Meta and Microsoft.
This uptick in investor sentiment came despite earlier economic data showing a contraction in the U.S. gross domestic product (GDP) for the first quarter, marking the first negative growth since early 2022.
The strong performance by these tech companies helped alleviate concerns about an economic slowdown, particularly those linked to President Trump’s tariff policies.
Futures for the Dow Jones Industrial Average increased by around 0.2%, while the S&P 500 futures surged nearly 0.6%, and Nasdaq 100 futures saw a notable rise of 1.2%. In after-hours trading, Meta’s shares jumped over 4% after the company reported better-than-expected revenue, driven by robust advertising performance.
Microsoft’s stock soared by about 8%, fueled by strong results from its cloud services, particularly Azure, and optimistic future projections. These gains not only reflected well on the companies but also provided reassurance to investors about the resilience of the tech sector.
The initial market reaction to the GDP data was negative, with both the Dow and S&P 500 experiencing significant declines. However, as the day progressed, investors began to focus on the positive earnings reports, leading to a late-session rally that helped both indices recover from their earlier losses.
The Dow managed to close higher, erasing a substantial portion of its intraday decline. This recovery was further supported by news of ongoing trade discussions between the U.S. and China, which suggested a potential easing of tensions.
Looking ahead, the market is set to remain volatile, with additional earnings reports from major companies like Apple and Amazon expected to influence investor sentiment.
The strong performance by Meta and Microsoft has set a positive tone for the tech sector, but broader economic challenges, including the impact of tariffs and global trade dynamics, will continue to shape market trends.
As investors navigate these complexities, the resilience of big tech companies will be closely watched for signs of stability in an uncertain economic landscape.