Updates to afternoon

By Stephen Culp

NEW YORK, May 1 (Reuters) - Wall Street stocks rallied and gold prices slid on Thursday as solid earnings from big tech bolstered investor risk appetite.

All three major U.S. stock indexes began the month in positive territory, with upbeat quarterly results from Meta Platforms META.O and Microsoft MSFT.O benefiting the Nasdaq most, sending the tech-laden index up 2.3%.

The bellwether S&P 500 is on track to extend its gains to an eighth consecutive session, its longest winning streak since August 2024.

"Clearly sparking (Thursday's) rally was better-than-expected earnings from Microsoft and Meta, and once again calming some of the over-the-top recessionary worries that we were dealing with just a couple of weeks ago," said Ryan Detrick, chief market strategist at Carson Group in Omaha. "But the good news is stocks have now recovered from the selloff after 'Liberation Day.'"

U.S. President Donald Trump announced steep tariffs on April 2, which rattled world markets for much of last month.

The dollar advanced as the yen took a hit after the Bank of Japan cut its growth forecasts due to uncertainties surrounding U.S. tariff policy.

Trading was thin throughout Asia and Europe due to May Day holidays.

There were no major announcements regarding trade negotiations following Trump's April 2 announcement.

First quarter earnings season is well past its halfway point, with 325 companies in the S&P 500 having reported. Of those, 74% have beaten analyst expectations, according to LSEG.

Apple AAPL.O and Amazon.com AMZN.O are due to report after the closing bell, the fifth and sixth members of the so-called "magnificent seven" to post quarterly results, leaving chipmaker Nvidia NVDA.O, which is expected to release its first-quarter earnings on May 28.

"The reality is the economy is slowing but not dropping off a cliff, and some of these large tech companies are confirming that," Detrick added. "It's nice to talk about something besides tariffs, especially when it's backed by some solid earnings overall by some of the large tech companies."

On the economic front, U.S. factory activity remained in contraction, while jobless claims increased more than analysts expected.

The Dow Jones Industrial Average .DJI rose 273.01 points, or 0.67%, to 40,942.37, the S&P 500 .SPX rose 71.99 points, or 1.29%, to 5,641.05 and the Nasdaq Composite .IXIC rose 396.21 points, or 2.27%, to 17,842.55.

MAY DAY HOLIDAY

Many markets in Europe and the rest of the world were closed for the May Day holiday.

MSCI's gauge of stocks across the globe .MIWD00000PUS rose 5.12 points, or 0.61%, to 838.66.

The pan-European STOXX 600 .STOXX index rose 0.02%, while Europe's broad FTSEurofirst 300 index .FTEU3 fell 1.12 points, or 0.05%.

Emerging market stocks .MSCIEF fell 2.75 points, or 0.25%, to 1,110.09. MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS closed lower by 0.17% to 580.01, while Japan's Nikkei .N225 rose 406.92 points, or 1.13%, to 36,452.30.

The greenback continued its rebound on growing optimism over trade deals, gaining ground against the yen after the BoJ's outlook downgrade, which reduced the prospect for future rate hikes.

The dollar index =USD, which measures the greenback against a basket of currencies including the yen and the euro, rose 0.52% to 100.19, with the euro EUR= down 0.32% at $1.1291.

Against the Japanese yen JPY=, the dollar strengthened 1.75% to 145.58.

Longer-dated U.S. Treasury yields rose after factory data showed tariff-related strain on supply chains and elevated input prices, likely delaying potential rate cuts from the Federal Reserve.

The yield on benchmark U.S. 10-year notes US10YT=RR rose 5 basis points to 4.225%, from 4.175% late on Wednesday.

The 30-year bond US30YT=RR yield rose 5.4 basis points to 4.7338% from 4.68% late on Wednesday.

The 2-year note US2YT=RR yield, which typically moves in step with interest rate expectations for the Federal Reserve, rose 7.8 basis points to 3.699%, from 3.621% late on Wednesday.

Oil prices reversed their earlier slump on waning fears of softening demand.

U.S. crude CLc1 rose 1.77% to settle at $59.24 per barrel, while Brent LCOc1 settled at $62.13 per barrel, up 1.75% on the day.

Gold prices dropped to a two-week low, pressured by signs of easing trade tensions.

Spot gold XAU= fell 1.87% to $3,226.18 an ounce. U.S. gold futures GCc1 fell 2.76% to $3,213.80 an ounce.

(Reporting by Stephen Culp; Additional reporting by Marc Jones in London; Editing by Ed Osmond and Will Dunham)

((stephen.culp@thomsonreuters.com; 646-223-6076;))