Key Takeaways
- U.S. equity markets slipped mildly on Thursday as futures for the S&P 500, Nasdaq 100 and Dow Jones fell after a mixed bag of Big‑Tech earnings.
- Meta’s share price dropped ~7% on weaker‑than‑expected capex and user‑growth figures, while Microsoft was flat despite strong cloud growth; Alphabet and Amazon each rose on upbeat quarterly results.
- Oil prices edged higher amid persisting U.S.–Iran tensions, with reports that the Trump administration intends to maintain a naval blockade of Iran until a nuclear deal is reached.
- The Federal Reserve held rates steady at 3.5‑3.75% (an 8‑4 vote, the first dissent since 1992); Chair Jerome Powell’s tenure ends next month, with Kevin Warsh expected to succeed him but facing limited support for near‑term cuts.
- Upcoming data releases on Thursday—pre‑liminary Q1 GDP, the PCE inflation gauge, and weekly jobless claims—will give further clues on the Fed’s policy path.
- Despite Thursday’s dip, major indexes are on track for their best monthly performance since 2020, with the S&P 500 poised for a ~9.3% April gain, the Nasdaq for ~14.3%, and the Dow for ~5.4%.
U.S. equity markets opened lower on Thursday, with futures tied to the broad market indices showing modest declines after a night of mixed earnings from the technology sector. S&P 500 futures slipped 0.22%, Nasdaq 100 futures fell 0.23%, and Dow Jones Industrial Average futures dropped 285 points, or 0.58%. During the regular session, the blue‑chip Dow continued its slide, losing 280.12 points (0.57%) to mark its fifth consecutive losing day. The broader S&P 500 edged down just 0.04%, while the Nasdaq Composite managed a tiny 0.04% gain, reflecting a divergence between the more defensive industrial stocks and the tech‑heavy index.
The day’s market action was heavily influenced by the latest quarterly reports from several “Magnificent Seven” constituents. Meta (the parent of Facebook) saw its shares tumble roughly 7% after reporting first‑quarter capital expenditures that came in below analyst expectations and disappointing user‑growth numbers. In contrast, Microsoft’s stock remained essentially flat despite beating both top‑ and bottom‑line estimates; the company highlighted a 40% surge in revenue from Azure and other cloud services, underscoring continued strength in its enterprise segment. Alphabet and Amazon also released results after the close on Wednesday. Alphabet gained about 7% after posting a first‑quarter revenue beat and exceeding forecasts for Google Cloud revenue. Amazon’s shares rose approximately 3% as its first‑quarter earnings topped expectations and its cloud‑computing division posted robust growth.
Energy markets moved in the opposite direction, with crude oil prices climbing higher on Wednesday amid escalating geopolitical tension between the United States and Iran. The Wall Street Journal cited U.S. officials saying President Donald Trump instructed his aides to prepare for an extended naval blockade of Iran. Subsequent reporting from Axios indicated that Trump dismissed Iran’s proposal to reopen the Strait of Hormuz, insisting the blockade would stay in place until a deal addressing Tehran’s nuclear program could be reached. The sustained tension provided support for oil prices, which continued their upward trajectory through the session.
On the monetary policy front, the Federal Reserve voted to keep interest rates unchanged in the 3.5‑3.75% range, a decision that was widely anticipated. However, the 8‑4 split marked the first time since 1992 that four Fed officials dissented from the majority view. Chair Jerome Powell’s tenure is set to conclude next month, and Kevin Warsh—Trump’s nominee to succeed him—appears on track to assume the chairmanship. Analysts warn that Warsh may struggle to gather enough support for near‑term rate cuts, given the current dissent among policymakers who remain uneasy about rising inflation. Sonu Varghese, global macro strategist at Carson Group, noted that the Fed’s unchanged stance suggests a reluctance to cut rates for the remainder of the year, with several FOMC members preferring to signal that the next move may not be a reduction.
The week ahead promises a slew of economic data that could further shape market sentiment. Thursday’s calendar includes the preliminary first‑quarter gross domestic product (GDP) reading, the personal consumption expenditures (PCE) report—the Fed’s preferred inflation gauge—and weekly jobless claims. Powell has already indicated that core PCE, which strips out volatile food and energy prices, is expected to come in at 3.2% for March. In addition to the data releases, a batch of corporate earnings is scheduled for Thursday morning, featuring reports from Caterpillar, Merck, Eli Lilly, and Bristol‑Myers Squibb, with Apple set to announce its results in the afternoon.
Despite Thursday’s modest pullback, the month of April has been remarkably strong for U.S. equities. The S&P 500 is on pace for a 9.3% advance, the Nasdaq Composite for a 14.3% jump, and the Dow Jones Industrial Average for a 5.4% gain—each representing the best monthly performance since 2020. The rally has been driven largely by the technology sector’s resilience, even as individual stocks like Meta experienced short‑term setbacks. As investors digest the forthcoming earnings and economic indicators, the market’s trajectory will hinge on whether inflation pressures ease enough to allow the Fed to contemplate rate cuts later in the year, or whether geopolitical risks and sticky price pressures keep the central bank on a hold‑steady path.