By Alex Financials

U.S. stock markets rallied on Thursday, buoyed by strong earnings from major technology firms and investor optimism over potential easing of trade tensions. The S&P 500 climbed 0.5% to 6,118.71, the Dow Jones Industrial Average rose 0.9% to 44,565.07, and the Nasdaq Composite added 0.2% to 20,053.68.

Big Tech Leads the Charge

Leading the market’s upward momentum were robust earnings reports from technology giants. Microsoft ($MSFT) reported a 17% increase in quarterly revenue, driven by strong demand for its cloud and AI services, with earnings per share reaching $2.94 . Alphabet ($GOOGL) also surpassed revenue expectations and announced its first-ever dividend, signaling confidence in its financial stability.

Tesla ($TSLA) saw its shares rise 1.6% to $254.67, despite reporting a 36% decline in European sales for March. The company’s performance was bolstered by investor confidence in its long-term growth prospects.

Tariff Tensions and Market Volatility

Investors remain cautious amid ongoing trade tensions. Treasury Secretary Scott Bessent acknowledged that the recently imposed 145% tariffs on Chinese goods are unsustainable, hinting at potential policy adjustments . These tariffs, part of President Trump’s “Liberation Day” initiative, have contributed to market volatility and raised concerns about global economic growth.

The uncertainty surrounding trade policies has led to fluctuations in the bond market, with 10-year Treasury yields falling below 4.35%. This decline reflects investor anticipation of possible Federal Reserve rate cuts to mitigate economic slowdown.

Mixed Corporate Earnings

Beyond the tech sector, corporate earnings presented a mixed picture. PepsiCo ($PEP) lowered its full-year earnings forecast due to increased supply chain costs stemming from tariffs, despite beating revenue estimates . IBM ($IBM) shares declined 7% as the company reported strong earnings but expressed concerns over client hesitation amid economic uncertainty.

In contrast, Merck ($MRK) reported better-than-expected quarterly results, driven by strong sales of its cancer drug Keytruda and HPV vaccine Gardasil. The company raised its full-year guidance, leading to a 3.1% increase in its stock price.

Outlook

While the market’s rebound is encouraging, analysts caution that sustained growth depends on resolving trade disputes and stabilizing economic indicators. Investors will be closely monitoring upcoming Federal Reserve meetings and international trade developments for further direction.​