US stocks rally on big tech earnings
Stocks rose Thursday, as strong results from Meta Platforms boosted tech-related names, and investors weighed the latest data on the US economy.
Stocks rose despite weaker-than-expected GDP data, which may suggest to some investors that the Federal Reserve could soon wrap up its tightening campaign. The Fed is slated to announce its latest policy decision next week.
The US economy grew 1.1 per cent in the first quarter, while economists polled by Dow Jones forecasted an expansion of 2 per cent. The report also showed stronger-than-expected inflation, with prices increasing 4 per cent compared with a consensus estimate of 3.7 per cent.
Overnight the Dow Jones Industrial Average advanced 524.29 points, or 1.57 per cent, putting it on pace for the best day since Jan. 6. The Nasdaq Composite jumped 2.4 per cent, while the S&P 500 climbed 2 per cent.
The market strength was driven by the Meta platform results after Microsoft and Google had set the bullish tone earlier this week
Meta shares leapt more than 14 per cent as the company reported quarterly revenue that beat expectations and issued an upbeat forecast. After three straight quarters of falling revenue last year, the company finally saw an uptick in ad sales for a 3 per cent revenue jump from Q1 2022. Profits were down, but the company still beat expectations, and Facebook gained users again after losses last year. Several analysts hiked their price targets following the release.
In after market trading, there is further positive news out of the tech sector – Amazon has reported quarterly profit that topped estimates on its cost cuts and surprisingly strong sales in the cloud-computing division, a sign the retailer’s business is weathering an uncertain economy. The shares gained about 8 per cent in extended trading.
In commodity news, the iron ore price decline continues amid a slowing chinese demand recovery. Iron ore prices have been impacted by a weaker-than-expected peak construction season in China, which runs from April through June. Additionally, China’s flagship campaign to squeeze debt from the real estate sector has led to subdued commodities demand, as developers focus on completing existing projects with few new projects in the pipeline.
Across the sectors all sectors of the market rose led by media & entertainment, software & services, and real estate companies.
The SPI futures are pointing to a 0.8 per cent gain.
One Australian dollar at 7:10 AM is buying 66.27 US cents..
Iron ore futures are pointing to a 0.1 per cent fall.
Gold added 0.05 per cent. Silver gained 0.49 per cent. Copper gained 0.85 per cent and oil rose 0.74 per cent.
Figures around the globe
Across the Atlantic, European markets closed mixed. London’s FTSE lost 0.27 per cent, Frankfurt added 0.03 per cent while Paris closed 0.23 per cent higher.
In Asian markets, Tokyo’s Nikkei added 0.14 per cent, Hong Kong’s Hang Seng gained 0.42 per cent and China’s Shanghai Composite closed 0.67 per cent higher.
Yesterday, the Australian sharemarket closed 0.32 per cent lower at 7273.
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Sources: Bloomberg, FactSet, IRESS, TradingView, UBS, Bourse Data, Trading Economics, CoinMarketCap.
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