By Ryan Dezember and Caitlin McCabe

Strong earnings from big technology firms and easing trade tensions fueled a rally in stocks, lifting the Nasdaq Composite to levels last reached before President Trump's tariff announcement touched off a roller-coaster April.

The tech-heavy Nasdaq gained 1.5%, up 0.6% from its April 2 close. The S&P 500, which added 0.6% on Thursday, ended 1.2% shy of where it settled before Trump's barrage of tariffs were unleashed from the White House Rose Garden. The Dow Jones Industrial Average rose 0.2%, or 84 points, Thursday.

Though all three indexes remain in the red since the start of the year, they ended one of the wildest-ever months on the upswing and the momentum continued into May. Thursday was the eighth consecutive session in which the Dow and the S&P 500 have risen. The S&P 500's 8.6% gain over that stretch is its best eight-day streak since November 2020, when markets were climbing back from the Covid crash.

Thursday's gains were propelled by better-than-expected quarterly results from Microsoft and Meta Platforms, reassuring investors of the relative resilience of the Magnificent Seven tech giants to tariff uncertainty.

Facebook parent Meta reported strong sales and said growth would remain steady, assuaging concerns tariffs would harm its digital-ads business -- a chunk of which comes from Chinese companies. Its shares rose 4.2%.

Microsoft, meanwhile, indicated that big corporate clients aren't slashing technology budgets just yet. Its stock jumped 7.6% to pace the Dow, and is now up on the year after a swoon.

Though Matthew Spradlin, a Richmond, Va., wealth manager at Steward Partners, has preached diversification to clients unsettled by the uncertain economic outlook, he said it is important to stay invested in the big stocks that have driven the past few years' market gains.

"When I see those types of companies down 20, 30, 50% in some cases, I'm looking to add to those positions," Spradlin said. "I may not be rewarded two weeks later like we saw in April, but I know at some point those companies are going to come back into favor."

Strong earnings drove other big gains Thursday. Carrier Global, which makes air conditioners and refrigeration equipment, climbed 12% to lead the S&P 500 higher after it topped Wall Street's sales and profit forecasts, said it had fully mitigated the impact of tariffs, and boosted its full-year outlook.

Earnings caused big declines at other firms. Poultry producer Pilgrim's Pride fell 14% and Graphic Packaging Holding lost 16%. Drugmaker Eli Lilly and medical device maker Becton, Dickinson shed 12% and 18%, respectively.

Bond yields rose. The yield on benchmark 10-year Treasury notes ended at 4.228%, up from 4.173% Wednesday.

Gold prices fell. A strengthening dollar and easing trade tensions hit the precious metal, to which fearful investors have flocked. Gold futures for May delivery shed 2.9%, or $95 a troy ounce, to close at $3,210. That is still up 22% from the start of the year.

Economic data Thursday was mixed. Separate Commerce Department reports showed that in March construction spending declined, though sales of light trucks, which include minivans and sport-utility vehicles, were nearly a million more than economists had expected.

The day after GDP data showed that the U.S. economy shrank in the first quarter because of a surge in imports ahead of tariffs, a gauge of factory activity also showed contraction. The manufacturing index of the Institute for Supply Management slipped to a five-month low of 48.7% in April, down from 49% the prior month. That was better than economists feared, yet any number below 50% signals shrinkage.

Initial jobless claims last week were higher than forecast and the number of people seeking ongoing unemployment benefits rose to about 1.92 million for the week ending April 19, the most since November 2021, the Labor Department said.

Investors will get a more robust look at the jobs market -- and some of the first solid economic data since Trump's April 2 tariff blitz -- on Friday when the Labor Department releases April employment data.

Overseas, the yen weakened after the Bank of Japan held interest rates steady and halved its growth forecast for its economy on account of tariffs. The Nikkei 225 ended 1.1% higher, its sixth consecutive daily gain.

Markets in China, France, Germany, and Italy, among other countries, were closed for their Labor Day.

Write to Ryan Dezember at ryan.dezember@wsj.com and Caitlin McCabe at caitlin.mccabe@wsj.com

(END) Dow Jones Newswires

May 01, 2025 16:46 ET (20:46 GMT)

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