Market Surge: S&P 500, Nasdaq Rally on Tech Earnings as Economic Concerns Ease | May 1, 2025 Recap

Major Indexes Rebound After Initial GDP Shock

U.S. markets staged a remarkable comeback on Thursday, May 1, 2025, with major indexes posting solid gains following strong earnings reports from tech giants. The Dow Jones Industrial Average climbed 219 points (0.54%), while the S&P 500 jumped 1.02% and the Nasdaq Composite surged 1.43%, extending Wednesday’s late-session recovery.

Today’s rally came despite yesterday’s concerning GDP report showing the U.S. economy contracted by 0.3% in the first quarter of 2025 – the first negative growth since Q1 2022. Investors appeared to look past these economic concerns, focusing instead on strong corporate earnings and the potential for Federal Reserve rate cuts later this year.

“While market volatility may persist until more tariff certainty emerges, we think the sharpest Trump policy swings are likely behind us and that the outlook is becoming more constructive,” noted UBS Global Wealth Management in a recent analysis.

Tech Giants Lead Market Higher on Strong Earnings

Technology stocks led today’s market gains following impressive quarterly results from several industry leaders. Microsoft (MSFT) surged 8.6% after reporting better-than-expected fiscal third-quarter earnings, with its Azure cloud business showing strong growth. The company highlighted that AI’s contribution to Azure growth increased to 16 percentage points, up from 13 percentage points in the previous quarter.

Similarly, Meta Platforms (META) gained 4.8% after posting stronger-than-expected revenue, with the company noting that its AI-powered advertising tools helped attract advertising dollars despite economic uncertainty related to tariffs.

Other AI-related stocks also performed well, with Nvidia (NVDA) rising 4.3%, Advanced Micro Devices (AMD) up 1.2%, and both Broadcom (AVGO) and Super Micro Computer (SMCI) gaining 3.5%.

Market Awaits Apple and Amazon Earnings

Investors are eagerly anticipating earnings reports from Apple (AAPL) and Amazon (AMZN), scheduled for release after today’s closing bell. These reports are particularly significant as both companies have substantial exposure to China and could be significantly impacted by President Trump’s tariff policies.

Amazon shares climbed 2.7% ahead of its earnings announcement, while Apple remained relatively flat at $212.42 following a federal judge’s ruling that the iPhone maker had violated a U.S. court order to reform its App Store.

Analysts expect Amazon to report Q1 revenue of $155.1 billion and earnings per share of $1.37, representing 8% year-over-year sales growth and a 40% profit increase. Much of this growth is expected to come from Amazon’s AI-heavy AWS cloud segment.

For Apple, analysts forecast earnings per share of $1.61, a 5.23% increase compared to the same quarter last year.

Tariff Concerns Continue to Loom Over Markets

Despite today’s positive market performance, concerns about President Trump’s tariff policies continue to weigh on investor sentiment. The “Magnificent Seven” tech stocks had stumbled early in 2025 as worries about the economic fallout from these tariffs grew.

Amazon and Apple are among the U.S. companies with the heaviest exposure to China tariffs, which explains their year-to-date underperformance compared to the broader market. Amazon is down 14% year-to-date, while Apple has fallen 15%, both worse than the S&P 500’s 5% decline.

According to Bank of America analyst Justin Post, the “biggest focus” for Amazon’s earnings call will be how CEO Andy Jassy and management address tariffs.

Other Notable Market Movers

Not all stocks participated in today’s rally. Qualcomm (QCOM) fell 8.2% after forecasting third-quarter revenue slightly below Wall Street estimates. Meanwhile, Tesla (TSLA) shares dropped more than 3% following reports that its board has initiated a search for a new chief executive to succeed Elon Musk, though Tesla Chair Robyn Denholm dismissed the report as “absolutely false.”

In the oil market, prices remained relatively stable after experiencing the biggest monthly drop since 2021 in April. Brent crude traded near $61 a barrel, while West Texas Intermediate was near $58.

Economic Data and Upcoming Events

Investors are closely monitoring upcoming economic data releases, including weekly jobless claims and a reading on the U.S. manufacturing sector expected later today. The crucial nonfarm payrolls report is scheduled for release tomorrow, which could provide further insights into the health of the U.S. economy.

Traders are now pricing in a full percentage point interest rate cut by the end of the year from the Federal Reserve, reflecting growing concerns about economic growth amid the uncertain trade environment.

Global Market Outlook

Asian markets showed mixed performance on Thursday, with Japan’s Nikkei 225 rising 0.92% and Australia’s S&P/ASX 200 gaining 0.14%. Several Asian markets, including South Korea, Hong Kong, China, and India, were closed for the Labor Day holiday.

The Bank of Japan kept its benchmark rate unchanged at 0.5%, pushing back the timing for when it expects to reach its inflation target amid intensified uncertainties due to the global trade war.

As we move into May, investors will be closely watching how corporate America navigates the challenging economic landscape shaped by tariff policies and signs of slowing growth. With the S&P 500 currently about 9% off its record close, market participants remain cautious but hopeful that strong corporate earnings can help offset macroeconomic headwinds.