On Thursday, Wall Street enjoyed a continued rally as U.S. companies reported better-than-anticipated earnings, though executives cautioned that the boost might not endure due to uncertainties instigated by President Donald Trump’s ongoing trade war.
The S&P 500 surged by 2%, drawing closer to its all-time high set earlier this year. The Dow Jones Industrial Average climbed 486 points, or 1.2%, and the Nasdaq composite soared by 2.7%.
Technology stocks were at the forefront, highlighted by the significant gain in ServiceNow’s shares. The AI platform company exceeded expectations with its first-quarter profit for 2025. Thanks to its AI agents that assist clients in managing customer relations, ServiceNow saw a stock increase of 15.5% after providing a revenue forecast that surpassed some analysts’ predictions.
Southwest Airlines similarly reported better-than-expected results for the year’s first quarter. Yet, its stock oscillated between gains and losses after the airline, like its peers, cited a murky economic outlook and withdrew some annual financial forecasts. CEO Bob Jordan mentioned that the company is “controlling what we can control” while cutting back on flights for the latter half of the year. Southwest’s shares eventually closed up by 3.7% after a recovery in afternoon trading.
American Airlines, another rival, also retracted its full-year financial forecasts amid economic uncertainties, promising updates when clarity on the outlook improves. Following strong quarterly earnings, its stock rose by 3.1%.
The unpredictability of Trump’s tariff strategy has left companies across various sectors reluctant to make definitive financial projections, a standard Wall Street practice. While U.S. stocks rallied in the days preceding on hopes that Trump might be easing his tariff stance and softening his criticism of the Federal Reserve, China remained firm, denying any active tariff negotiations and labeling any progress claims as “groundless as trying to catch the wind.”
Tan Jing Yi from Mizuho Bank’s Asia & Oceania Treasury Department mentioned the potential long-term economic harm from Trump’s so-called “headline turbulence.” He warned, “Sentiments swing from hopes of intense relief to inflicted economic gloom.”
The week’s market began with steep losses over trade war fears. It has been characterized by severe fluctuations, showcasing the recent volatility as investors grapple with the uncertain landscape, with conditions frequently changing. The consensus amidst investors is that without resolution on tariffs, which are feared to trigger a recession, the market remains in flux.
John Belton, a portfolio manager at Gabelli Funds, stated, “It’s an unhealthy market backdrop right now, and we’re trying not to react too much.” Across the U.S., households brace for possible price hikes, with the International Monetary Fund urging expedient resolutions to trade disputes that threaten global growth.
Despite these concerns, numerous U.S. firms continue to surpass profit forecasts for early 2025, though they maintain cautious stances facing the uncertain year ahead.
Toymaker Hasbro emerged victoriously, rallying 14.6% after reporting profit and revenue exceeding forecasts, driven by the popularity of its Magic: The Gathering game, among other products. Texas Instruments also experienced a rise of 6.6% after revealing unexpected profit strength.
One setback was Procter & Gamble, which dipped by 3.7% despite surpassing quarterly expectations, as it reported lower-than-expected revenue and trimmed its fiscal year profit growth forecast. The company anticipates a $200 million earnings setback due to rising commodity costs.
At PepsiCo, CEO Ramon Laguarta expressed concerns about “more volatility and uncertainty,” alluding to subdued consumer conditions and markets’ ambiguous outlook. Its stock dropped by 4.9% after downgrading profit forecasts for 2025, attributing cuts to tariff-induced costs, including a 25% tariff on imported aluminum cans impacting beverage companies.
Ultimately, the S&P 500 advanced by 108.91 points to reach 5,484.77. The Dow Jones Industrial Average gained 486.83 to 40,093.40, and the Nasdaq composite rose 457.99 to 17,166.04.
In the bond market, Treasury yields eased further after unsettling earlier hikes. Typically, yields decline amid market fears, but the unsettling prior increase stoked worries that Trump’s trade war was damaging the U.S. bond market’s reputation as a global safe haven.
The 10-year Treasury yield fell to 4.30% from 4.40% on Wednesday amid expectations of a potential Federal Reserve interest rate cut later this year to mitigate economic impacts possibly stemming from tariffs.
Yields declined post a report that highlighted more U.S. workers filing for unemployment benefits than economists anticipated last week. Another report showed larger-than-forecast declines in March home sales.
International stock markets showed mixed performances, with minor changes across Europe and Asia.