U.S. stocks closed higher on Thursday, May 1st, with the S&P 500 achieving its largest monthly advance since the year 2000. Both the S&P 500 and Nasdaq Composite indices reached new all-time highs. Investors shifted their focus to robust earnings from corporate giants such as Amazon, Alphabet (Google's parent company), and Eli Lilly, temporarily setting aside concerns over geopolitical tensions in the Middle East and the inflation outlook.
The Dow Jones Industrial Average rose by 790.33 points, or 1.62%, to close at 49,652.14. The Nasdaq Composite gained 219.07 points, or 0.89%, finishing at 24,892.31. The S&P 500 increased by 73.06 points, or 1.02%, to settle at 7,209.01. Throughout April, all three major indices recorded significant gains. The Dow climbed 7.14%, the Nasdaq surged 15.29%, and the S&P 500 advanced 10.42%.
Caterpillar's stock soared 10% on Thursday after the company reported quarterly results that exceeded expectations, providing a boost to the Dow. The industrial giant, often viewed as a barometer for the global economy, also raised its full-year revenue outlook. This report offered a glimmer of hope for the U.S. economy, which had shown disappointing growth in the first quarter. The U.S. Commerce Department reported on Thursday that first-quarter GDP grew at an annualized rate of 2%, which was higher than the 0.5% rate in the fourth quarter of 2025 but fell short of the 2.2% expectation.
Joining Caterpillar, Alphabet's stock rose 9%, providing additional support to the broader market. The company reported first-quarter revenue that beat analyst forecasts and raised the upper limit of its 2026 capital expenditure guidance to $1.9 trillion.
Analysts noted that this "earnings-driven" market behavior indicates that strong corporate profitability has temporarily overshadowed geopolitical risks. Previously, Brent crude oil prices had touched $126 per barrel due to U.S.-Iran tensions and disruptions to shipping in the Strait of Hormuz, creating upward pressure on oil prices and sparking inflation concerns.
However, not all stocks found favor with investors. Microsoft and Meta Platforms faced selling pressure after significantly raising their capital expenditure guidance for AI infrastructure. Meta's stock fell nearly 9% as investors worried about the return周期 on massive investments and slowing user growth; the company also increased its full-year capital expenditure forecast.
Microsoft confronted similar concerns, with the company stating that its expenditures would reach $1.9 trillion due to high memory costs.
Tom Graff, Chief Investment Officer at Facet, told CNBC that the most notable aspect of the "Magnificent Seven" tech giants' earnings was that "we didn't really get any new information." He pointed out that while from a GDP perspective, it is positive that these hyperscale companies are "spending so much on physical infrastructure," other worries persist, including concerns about company valuations.
Graff stated, "The ongoing question we will grapple with is: Will these AI expenditures ultimately translate into software-like margins, or will they not, forcing us to re-evaluate these multiples?"
Despite pressure on some tech stocks, the sector still contributed to the market's strong monthly performance. The S&P 500 has risen approximately 10% since the start of April, positioning it for its best monthly performance since November 2020. The Nasdaq Index has gained about 13%, on track for its strongest monthly showing since April 2020. The Dow is projected to have advanced over 6% in April, which would be its best monthly performance since November 2024.
Meanwhile, oil prices reversed course on Thursday. Brent crude futures fell 3%, trading above $114 per barrel, while West Texas Intermediate crude futures declined 2%, trading above $104 per barrel. On Wednesday, crude prices had risen due to persistently high tensions between the U.S. and Iran overseas. Reports indicated that President Trump had informed aides to prepare for a prolonged blockade against Iran.
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