Daily Fundamental Analysis: U.S. Indices Close Higher Following a Volatile Session
Key Takeaways:
- GDP numbers in the US show contraction in the economy of 0.3% in the first quarter of 2025
- US indices recover from big losses in yesterday’s session. Better-than expected tech earnings pushed stocks higher
- PCE numbers came lower than expected, signaling lower inflation
Markets recovered on Wednesday despite early volatility and a strong decline in all major indices. The S&P 500 and Dow bounced back from steep losses, with the Dow recovering from a 780-point decline.
GDP data showed a 0.3% annualized decline, missing expectations of 0.4% growth and marking the first contraction since Q1 2022. Markets ultimately shrugged off weak data.
April saw significant volatility following Trump’s tariff policies, with the S&P 500 briefly entering bear market territory before recovering to end 9% below its peak.
The S&P 500 and Dow finished April down 0.8% and 3.2%, while the Nasdaq Composite gained 0.9%.
Stock futures rose early Thursday following strong tech earnings.
Futures tied to the Dow Jones Industrial Average, S&P 500, and Nasdaq 100 gained 0.54%, 1.02%, and 1.43% respectively.
Meta rose 5% on strong Q1 revenue, while Microsoft gained 7% after beating expectations and providing positive guidance. Tesla dropped 3% as its board began searching for Musk’s successor.
Upcoming earnings include CVS Health, Eli Lilly, McDonald’s, Apple, and Amazon. Economic releases will feature jobless claims and manufacturing data today, with Friday’s nonfarm payrolls report ahead.
Japan’s central bank maintained its 0.5% interest rate Thursday amid concerns over U.S. tariffs impacting economic outlook. The decision aligned with economic expectations during a period of heightened global trade tensions. Despite inflation remaining above 2% for 36 months, giving room for rate hikes, trade concerns have complicated monetary policy plans.
The BOJ stated it will raise rates if economic forecasts materialize, but warned of moderating growth due to external slowdown and declining corporate profits.
Recent U.S.-Japan trade talks ended without breakthroughs. Following the decision, the Nikkei 225 rose 0.54%, Topix added 0.23%, and the yen weakened 0.29% to 143.49 against the dollar.
