Market Performance Overview
The stock market rallied for the third consecutive session, with significant gains across major indices. The Dow Jones Industrial Average surged nearly 500 points, while the S&P 500 registered a 2.0% gain. Meanwhile, the Nasdaq Composite rose by 2.7%. As a result, the S&P 500 is now 10.1% above its low close on April 8 (4,982.77).
Factors Driving the Market
- Short-covering and a fear of missing out on further gains contributed to the upward movement.
- Strength in mega cap stocks and chipmakers played a significant role, with the PHLX Semiconductor Index (SOX) surging 5.6% and the Vanguard Mega Cap Growth ETF (MGK) rising 3.1% from the previous day.
- Broad buying interest was supported by dropping market rates and positive economic data.
Treasury Yields
- The 10-year yield settled eight basis points lower at 4.31%.
- The 2-year yield settled seven basis points lower at 3.79%.
- Treasury yields were already lower before the market received a solid weekly initial claims number (222,000) and ahead of the $44 billion 7-year note sale, which met soft demand.
Earnings News
Recent earnings news has been mixed:
- Chipotle Mexican Grill (CMG) increased by 1.6%.
- Southwest Airlines (LUV) rose 3.7%.
- IBM (IBM) dropped 6.6%.
- Merck (MRK, Financial) gained 1.4%.
- Texas Instruments (TXN) surged 6.6%.
- ServiceNow (NOW) climbed 15.5%.
- Whirlpool (WHR) rose 1.6%.
Year-to-Date Performance
- Dow Jones Industrial Average: -5.8% YTD
- S&P 500: -6.8% YTD
- S&P Midcap 400: -8.9% YTD
- Nasdaq Composite: -11.1% YTD
- Russell 2000: -12.2% YTD
Economic Data Review
- March Durable Orders rose 9.2% (consensus 1.5%); prior was 0.9%.
- March Durable Goods -ex transportation was flat (consensus 0.3%); prior was 0.7%.
- Rebound in nondefense capital goods, excluding aircraft, rose 0.1% after a 0.3% decline in February, indicating a modest pickup in business spending.
- New orders for primary metals increased 0.7% following a 1.3% rise in February.
- Weekly Initial Claims were 222K (consensus 220K); prior was revised to 216K from 215K.
- Weekly Continuing Claims were 1.841 million; prior was revised to 1.878 million from 1.885 million.
- Initial jobless claims continue to run at low levels, not indicative of a recession.
- March Existing Home Sales were 4.02 million (consensus 4.20 million); prior was revised to 4.27 million from 4.26 million.
- Existing home sales declined month-over-month in all regions, while the median selling price increased month-over-month, indicating affordability constraints due to higher prices and mortgage rates.
Upcoming Data
Looking ahead to Friday, market participants will receive the following data:
Guru Stock Picks
Carl Icahn has made the following transactions:
- Add in CVI by 0.18%
Today's News
Alphabet (GOOG, GOOGL) shares rose 3% in postmarket trading after the company reported earnings that exceeded expectations, driven by its Services and Cloud units. Revenue increased by 12% to $90.23 billion, surpassing the forecast of $89.15 billion. Operating income rose over 20%, and net income saw a 46% year-over-year gain. CEO Sundar Pichai highlighted the company's AI advancements and strong engagement with AI features.
Intel (INTC, Financial) shares fell 6.4% in extended trading despite reporting first-quarter results that topped expectations. The semiconductor giant earned an adjusted $0.13 per share on revenue of $12.7 billion, which was flat year-over-year. The Client Computing Group saw an 8% decline, while Datacenter and AI revenue rose 8%. The foundry segment experienced a 7% revenue increase, but overall product revenue fell 3%.
Merck & Co. (MRK, Financial) reported Q1 2025 revenue of $15.5 billion, driven by oncology, animal health, and new product launches. CEO Rob Davis emphasized the company's focus on research and development, with significant investments in U.S. manufacturing. Oncology revenue was led by KEYTRUDA, generating $7.2 billion.
Chip stocks, including STMicroelectronics (STM, Financial) and Lam Research (LRCX, Financial), led the sector higher after reporting strong quarterly results. STMicroelectronics' shares jumped 6%, and Lam Research's stock rose 6% following fiscal third-quarter results that exceeded expectations. Other notable gainers included NXP Semiconductors (NXPI), GlobalFoundries (GFS), and Lattice Semiconductor (LSCC).
Fiserv (FI, Financial) stock dropped 17% after the company's Q1 earnings revealed a slowdown in its merchant system Clover's volume and revenue growth. Clover's revenue growth moderated to 27% year-over-year, down from 29% in the previous quarter. Analysts expressed concerns about Fiserv's ability to meet its guidance amid these challenges.
Procter & Gamble (PG, Financial) reported a 1% organic sales growth in Q3 2025, driven by pricing and new product launches. CEO Jon Moeller emphasized the importance of innovation and maintaining investments in marketing. The company returned $3.8 billion to shareholders through dividends and share repurchases during the quarter.
Amazon (AMZN, Financial) and Nvidia (NVDA, Financial) dismissed concerns about a slowdown in demand for AI data centers. Both companies reported strong demand and continued expansion plans. Nvidia's high-end processors are crucial for these data centers, and both companies saw their shares rise by 3% during afternoon trading.
United Rentals (URI, Financial) reported rising demand for equipment rentals amid economic uncertainty. The company surpassed expectations in its equipment rentals division and reaffirmed its full-year projections for adjusted earnings and revenue. CFO Ted Grace noted that uncertainty tends to favor rental over ownership, supporting revenue growth.
Freeport-McMoRan (FCX, Financial) shares climbed 6.3% after posting better-than-expected Q1 earnings and revenues, despite a decline in production due to maintenance in Indonesia. The company benefited from rising commodity prices, with copper's average realized price increasing 12.7% due to strong demand from China and U.S. tariffs.
GuruFocus Stock Analysis
- Procter & Gamble Trims Outlook, Signals Price Hikes as Tariffs Weigh on Growth by Faizan Farooque
- Nvidia Supplier SK hynix Rides AI Boom With Big Q1, Steady HBM Outlook by Moz Farooque
- Goldman Flags Record Cash Surge Into U.S. Stocks as Global Growth Slows by Moz Farooque
- TSMC's New A14 Chip Targets Future AI in Phones and Smart Devices by Moz Farooque
- ServiceNow Soars on AI Agent Buzz and Public Sector Strength by Moz Farooque
