On Wednesday, stock futures experienced a notable rise after two major players in the technology sector reported impressive quarterly results. Futures associated with the Dow Jones Industrial Average increased by 138 points, representing a 0.3% gain. Meanwhile, S&P 500 futures surged by 0.8%, and Nasdaq 100 futures saw a substantial increase of 1.3%.
In extended trading, Meta Platforms showcased significant growth, advancing more than 5% due to revenue that exceeded expectations in the first quarter. Additionally, Microsoft experienced a nearly 7% jump, fueled by strong performances in both its top and bottom lines during the fiscal third quarter. Microsoft's success was further enhanced by robust results from its Azure cloud business and optimistic guidance for the future.
In the previous trading session on Wednesday, both the S&P 500 and the 30-stock Dow managed to post gains amid volatile trading conditions, recovering from earlier losses. At one point during the day, the broad market index had declined by over 2%, while the blue-chip Dow saw a drop of more than 780 points. This initial downturn was primarily triggered by weak economic data released by the Commerce Department, indicating that gross domestic product (GDP) had contracted at an annualized pace of 0.3%. This marked the first quarter of negative growth since the first quarter of 2022, falling short of economists' expectations, who had predicted a 0.4% gain.
Despite these disheartening results, investors shifted their focus and began buying back into the market later in the session, leading to a rebound that pushed both the Dow and S&P 500 into positive territory. Wednesday also marked the final trading day of April, a month characterized by significant volatility, particularly following President Donald Trump's announcement of reciprocal tariffs on April 2, which were later suspended. At one point, the S&P 500 briefly dipped into a bear market, dropping over 20% from its record high in February before managing to recover some of its losses. Ultimately, the broad market index concluded Wednesday approximately 9% below its record close.
However, this recovery was not enough to prevent the S&P 500 and Dow from experiencing a losing month in April, with declines of about 0.8% and 3.2%, respectively. In contrast, the Nasdaq Composite posted a modest gain of 0.9% during the same period. Market volatility is expected to persist until there is greater clarity surrounding tariff policies. Nevertheless, UBS Global Wealth Management's chief investment officer, Solita Marcelli, expressed optimism, stating that the most significant shifts in Trump's policy are likely behind us and that the overall outlook is becoming more constructive.
As Trump's first 100 days brought political uncertainty, fluctuating trade policies, and tumultuous markets, Marcelli advised investors to concentrate on strategies that effectively manage and navigate through volatility. Looking ahead to Thursday, investors are eagerly anticipating quarterly results from notable companies such as CVS Health, Eli Lilly, and McDonald's in the morning, followed by Apple and Amazon in the afternoon. On the economic front, traders will be monitoring weekly jobless claims data and insights into the U.S. manufacturing sector, with the key nonfarm payrolls report scheduled for release on Friday.
