U.S. stocks advanced during Thursday's midday session, with the Dow Jones Industrial Average climbing 700 points. Investors shifted their attention to robust earnings reports from corporate giants such as Amazon, Google's parent company Alphabet, and Eli Lilly, temporarily setting aside concerns over Middle East tensions and inflation outlooks.
The Dow Jones rose by 729.07 points, or 1.49%, to 49,590.88; the Nasdaq Composite edged up 3.36 points, or 0.01%, to 24,676.60; and the S&P 500 gained 30.89 points, or 0.43%, reaching 7,166.84.
Following a wave of earnings releases from major technology firms on Wednesday, Amazon and Eli Lilly saw their shares rise by more than 2% and 6%, respectively, after reporting better-than-expected first-quarter results, becoming key drivers of the broader market's advance.
Analysts noted that this "earnings-driven" rally indicates strong corporate profitability has temporarily overshadowed geopolitical risks. Earlier, Brent crude prices briefly touched $126 per barrel amid U.S.-Iran tensions and disruptions in shipping through the Strait of Hormuz, adding upward pressure on oil prices and stoking inflation worries.
However, not all stocks gained traction. Microsoft and Meta Platforms faced sell-offs after significantly raising their capital expenditure guidance for artificial intelligence infrastructure. Meta's stock fell nearly 9% as investors expressed concerns over the payback period for heavy investments and slowing user growth.
Caterpillar's shares rose 6% following better-than-expected quarterly results, boosting Dow futures. Amazon, also a Dow component, contributed to the gains, climbing over 2% after releasing strong first-quarter earnings.
It is worth noting that declines in Meta Platforms and Microsoft, which fell 9% and 2% respectively, limited gains in the S&P 500 and Nasdaq. Meta's stock was weighed down by its latest capital expenditure outlook and disappointing user growth. Microsoft's shares retreated as the company indicated expenditures could reach $1.9 trillion due to high memory costs.
Oil prices reversed course on Thursday, with Brent crude futures falling 3% to trade above $114 per barrel, while West Texas Intermediate crude declined 2% to hover above $104. On Wednesday, crude prices had risen due to heightened overseas tensions between the U.S. and Iran. Reports indicated that former President Trump had instructed aides to prepare for a prolonged blockade against Iran.
Wall Street had just concluded a mixed trading session, with the Dow falling over 200 points on Wednesday, while the S&P 500 and Nasdaq ended largely unchanged.
Previously, the Federal Reserve voted to maintain interest rates within the range of 3.5% to 3.75%, largely in line with investor expectations. However, the 8-4 vote marked the first time since 1992 that four Fed officials dissented.
The April policy meeting was likely the last chaired by Fed Chair Jerome Powell before his term concludes next month. Kevin Warsh, nominated by Trump to succeed Powell, is expected to take over leadership of the Fed.
According to Sonu Varghese, Global Macro Strategist at Carson Group, more obstacles have emerged on the path to rate cuts. In a Wednesday email, he stated, "The Fed held rates steady, and we expect this to persist for the remainder of the year. Several FOMC members are clearly uneasy about rising inflation and wish to signal that the next move may not be a rate cut. With Powell opting to remain as a Fed governor, proponents of rate cuts, including incoming Chair Kevin Warsh, are in the minority. Warsh will find it difficult to persuade the majority to cut rates."
Thursday also marked the final trading day of April, a month that saw significant gains for technology stocks. The S&P 500 was on track for a 9.3% monthly increase, while the Nasdaq was poised for a 14.3% rise—both indices set to record their best monthly performance since 2020. The Dow was expected to gain 5.4% in April, its strongest monthly performance since November 2024.
On the economic data front Thursday, U.S. core inflation rose to 3.2% in March, while first-quarter GDP grew at an annualized rate of 2%.
As rising oil prices, driven by U.S.-Israel tensions with Iran, posed new challenges for the Fed, American consumers faced increasing prices in March.
The Commerce Department reported Thursday that the core Personal Consumption Expenditures price index, excluding food and energy, rose 0.3% on a seasonally adjusted monthly basis, pushing the 12-month inflation rate to 3.2%. This reading matched the Dow Jones consensus expectation.
The headline inflation figure, which includes volatile components like gasoline and food, was higher, increasing 0.7% month-over-month and reaching 3.5% year-over-year, also in line with expectations.
In other economic news, the Commerce Department reported that first-quarter Gross Domestic Product grew at a seasonally adjusted annual rate of 2%, up from 0.5% in the fourth quarter of 2025 but below the expected 2.2%.
Initial jobless claims in the U.S. fell to their lowest level in decades last week, suggesting that announcements of layoffs have not yet translated into significant actual job cuts.
Data released by the Labor Department on Thursday showed that initial claims for unemployment benefits decreased by 26,000 to 189,000 in the week ending April 25. Economists had forecast a median of 212,000 claims.
Continuing claims, a proxy for the number of people receiving benefits, fell to 1.79 million in the prior week, the lowest level in two years.
The Fed held interest rates steady on Wednesday, with Chair Jerome Powell citing the labor market showing "increasing signs of stability" as one reason there was no urgency to cut rates further.
Before seasonal adjustment, initial jobless claims also declined last week. New York led the drop, with claims falling by nearly 11,000, erasing sharp increases from the previous two weeks. Significant decreases were also recorded in California and Connecticut.
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