Market Surges on Tech Earnings: Wall Street Rebounds After GDP Contraction

Major Indexes Recover from Early Losses as Tech Giants Lead the Way

The U.S. stock market staged an impressive rally on Thursday, May 1, 2025, with major indexes climbing to one-month highs following strong earnings reports from tech giants. This positive momentum comes just one day after data showed the U.S. economy contracted for the first time in three years.

The S&P 500 rose 1.03% to 5,626.20, extending its winning streak to eight consecutive sessions – a feat not seen since November. The Dow Jones Industrial Average gained 0.47% to 40,859.88, while the Nasdaq Composite outperformed with a robust 1.99% increase to 17,793.47.

Thursday’s rally marks a significant turnaround from Wednesday’s volatile session, when all three major indexes initially plunged around 2% following the Commerce Department’s report that GDP fell at an annualized pace of 0.3% in Q1 2025. However, markets recovered late in the session after reports that the U.S. had been reaching out to China seeking to negotiate on tariffs.

Tech Earnings Power Market Momentum

The market’s upward trajectory was largely driven by stellar earnings from Microsoft (MSFT) and Meta Platforms (META). Microsoft shares surged nearly 9% after the company beat Wall Street estimates and forecast stronger-than-expected quarterly growth for its Azure cloud-computing business. Meta jumped more than 5% on better-than-anticipated revenue, bolstered by strong advertising performance.

The positive sentiment spread across the tech sector, with Nvidia (NVDA) climbing 4.09% and Amazon (AMZN) rising 4% ahead of its earnings report. Apple (AAPL) shares remained relatively flat, edging up just 0.07% as investors awaited its quarterly results after the closing bell. The company faced some pressure after a federal judge ruled Apple had violated a U.S. court order to reform its App Store.

Tesla (TSLA) shares were in focus, gaining a modest 0.04% despite reports in The Wall Street Journal that its board had initiated a search for a new CEO to replace Elon Musk. Tesla Chair Robyn Denholm dismissed the report as “absolutely false.”

Key Earnings Reports and Economic Data

Thursday was one of the busiest days of earnings season with 971 companies reporting results. Among the notable reporters were Eli Lilly (LLY), which saw its stock decline 9.92% despite beating earnings expectations, and CVS Health (CVS), which jumped after exceeding first-quarter forecasts.

After the closing bell, investors eagerly awaited results from tech heavyweights Apple and Amazon, which could further influence market sentiment heading into Friday’s trading session.

On the economic front, Thursday brought the release of construction spending data and the ISM Manufacturing Index. Investors are now looking ahead to Friday’s crucial employment situation report, which could provide further insights into the health of the U.S. economy.

Looking Ahead: Upcoming Market Catalysts

The market faces several key events in the coming weeks. The economic calendar for May includes the ISM Non-Manufacturing Index on May 5, trade balance data on May 6, and the Consumer Price Index on May 13.

On the earnings front, investors will be watching for reports from Walmart (WMT) and Applied Materials (AMAT) on May 15, followed by Nvidia’s highly anticipated results on May 28.

Market analysts remain cautiously optimistic despite recent volatility. As UBS Global Wealth Management chief investment officer Solita Marcelli noted, “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.”

With first-quarter earnings growth for S&P 500 companies now estimated at 11.5% year-over-year, the market appears to be weathering economic uncertainties better than initially feared. However, ongoing trade tensions and the recent GDP contraction suggest investors should remain vigilant as we move deeper into the second quarter of 2025.