By Sabrina Escobar
Up and Away. The markets had a remarkable day on Thursday, with strong showings from all the major indexes and a standout performance from one in particular.
The Dow Jones Industrial Average closed 1.6% higher. The S&P 500 and the Russell 2000 both had record closes, gaining 1% and 2.1% respectively. The Nasdaq Composite clinched its best month since April 2020 and its seventh record close of the year, thanks to a rally in semiconductor stocks.
The tech-heavy index closed 0.9% higher, up 15.3% this month. Chip stocks were doing all the heavy lifting -- the iShares Semiconductor ETF surged 2.4% today on signs that Big Tech is still splurging on building out AI.
Shares of the tech companies themselves, many of which reported earnings Wednesday afternoon, weren't doing as well, largely for AI-related reasons. While the spending spree is great news for chip manufacturers, it's making some investors nervous about what it could mean for tech company margins, especially because it could take some time to see a return on capital.
Meta Platforms was down 8.6% today, while Microsoft was off 3.9%. Amazon.com eked out a 0.8% gain, but Alphabet was the real winner, closing 10% higher. Its Google Cloud growth -- a hotly watched metric -- was a huge standout. Quarterly cloud sales hit $20 billion, up 63% year over year, while the backlog nearly doubled since last quarter. The strong cloud performance is helping justify Alphabet's hefty spending.
The tech earnings jamboree continued after markets closed on Thursday. Apple's earnings topped expectations, as did the company's outlook, sending the stock higher in after-hours trading.
A retreat in oil prices may have helped indexes across the board -- even if they still remain high compared with prewar levels. Oil futures for Brent crude fell to $114 a barrel after hitting a four-year high of about $126 during intraday trading.
The Hot Stock: Quanta Services +15.8% The Biggest Loser: Willis Towers Watson -11.7%
Best Sector: Communication Services +4.0% Worst Sector: Technology -0.6%
Economic Data in the Shadow of Hormuz
Today was also a big day for the econ buffs with the release of first-quarter GDP and March's personal consumption expenditures index.
Gross domestic product, adjusted for inflation, grew at an annualized rate of 2% in the first quarter, according to the first estimate released by the Bureau of Economic Analysis on Thursday. While the figure came in a bit below expectations, it was a rebound from Q4's 0.5% increase.
Business spending and investment drove much of the gains in the first quarter, contributing 1.5 percentage points to the total 2% GDP growth, writes my colleague Megan Leonhardt. You can attribute a lot of that to the AI buildout -- spending on structures, equipment, and software related to AI was especially strong. Consumer spending held up as well, with personal consumption expenditures increasing 1.6% in Q1.
But economists warn that growth could slow if the war in the Middle East continues to drag on.
James McCann, senior economist, investment strategy at Edward Jones notes:
The risk stands that larger or more prolonged increases in oil prices could exacerbate the pressure on U.S. households and undermine spending. Much therefore depends on the success of diplomacy in coming weeks to diffuse tensions in the Middle East and reopen the important energy supply route through the Strait of Hormuz. In our view, the economy looks strong enough to weather a short-lived energy price spike, but a much larger and more prolonged inflation squeeze could be more challenging.
Indeed, the war had a more immediate impact on inflation. The PCE index rose to 3.5% on an annual basis in March, its highest level since August 2023. Core PCE, which strips out food and energy prices, rose 3.2%. Prices jumped for both durable and nondurable goods, reflecting how energy costs are working their way through supply chains.
Together, both reports likely complicate incoming Fed Chair Kevin Warsh's position, according to my colleague Nicole Goodkind. She writes:
He has said he intends to lower interest rates, arguing that productivity gains from AI could give him room to do so. At his Senate confirmation hearing last week, Warsh told lawmakers he prefers trimmed-mean inflation measures, which would put underlying inflation closer to 2.3%, well below the latest PCE reading. Other Fed officials are unlikely to adopt that same metric.
The Calendar
Ares Management, Cboe Global Markets, Chevron, Church and Dwight, Colgate-Palmolive, Dominion Energy, Estée Lauder, Exxon Mobil, Federal Realty Investment Trust, Linde, LyondellBasell Industries, and Moderna release earnings tomorrow.
The Institute for Supply Management releases its Manufacturing Purchasing Managers' Index for April.
What We're Reading Today
-- Intel's Big Stock Run-Up Hits Pause. Why Trump's Victory Lap Isn't
Helping.
-- Retirees, Here's What a Warsh Fed Could Mean for You
-- How to Invest in the Coming Boom in Clean Energy. 3 Stocks to Buy.
-- Eli Lilly Stock Jumps on Earnings Beat as Zepbound and Mounjaro Sales
Skyrocket
-- Caterpillar Earnings Show Clearly Why the Stock Has Joined the AI Party
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(END) Dow Jones Newswires
April 30, 2026 19:55 ET (23:55 GMT)
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