Meta, Microsoft lead market gains; Nvidia rises on AI spending hopes

The US stock market is experiencing a surge amid concerns of an economic slowdown, with equity markets leading the charge. One of the biggest concerns for the market was the slowdown in AI investments by the big tech companies. That seems to have been cleared now.

Meta Platforms’ strong Q1 revenue and CEO Mark Zuckerberg’s assurance that the company is well-positioned to navigate macroeconomic uncertainty have alleviated investor fears of potential threats from Trump’s tariffs and a US economic downturn.

Microsoft and Meta Platforms reported strong quarterly results, leading to an 8% and 4% increase in their respective shares on Thursday. Nvidia (NVDA) rose 2.5% due to Microsoft and Meta’s anticipated continued investment in AI infrastructure.

A calmer tone on tariffs and an optimistic earnings season have boosted market optimism. The S&P 500 and Dow are currently on a series of winning streaks due to strong earnings reports and a softening Trump administration stance on tariffs.

It has been a good start to a new Month. The major indices entered May having lost three straight months due to persistent uncertainty about where tariff policy will land and how it will affect the economy and global businesses. ‘Sell in May and Go Away’ may not occur in its true sense this time around.

The U.S. dollar index rose 0.7% to 100.20, bouncing back from a three-year low below 98 earlier this week.

Apple’s earnings report, despite exceeding expectations, revealed a continued decline in revenue across major markets, especially in China, raising concerns about consumer purchasing power and the growth outlook for Asia, a major demand center for U.S. tech giants.

“US consumers are becoming increasingly pessimistic about the economy and job market. Meanwhile, both the general and ISM Manufacturing PMI indexes weakened further in April, indicating a contraction in industrial activity—another discouraging signal for Q2 growth prospects,’ says Linh Tran, Market Analyst at XS.com.

Investors, however, need to remain cautious. Strong earnings do not reflect developments since ‘Liberation Day’, economic data is expected to soften in the next quarter due to headwinds including tariffs and slowing economic activity.

Michael Brown Senior Research Strategist at Pepperstone says, “Equity momentum is clearly with the bulls for the time being, and even though I fear markets are being lulled into a bit of a false sense of security at this stage, the upside is becoming increasingly difficult to fade. Maybe the first trade deal announcements will pan out as big old ‘buy the rumour, sell the news’ reaction.”