Trading activities during week 17 saw a surge in U.S., European, and Asian stocks, driven by strong earnings and moderate inflation data.
In the U.S., stocks closed higher on Friday, propelled by a rally in mega-cap growth stocks after Alphabet and Microsoft reported robust quarterly results. The S&P 500 and the Nasdaq posted their largest weekly percentage gains since early November 2023, breaking a streak of consecutive losses.
European markets also ended the week on a positive note, bouncing back from a slight decline in the previous session. Meanwhile, Asian markets experienced a mixed performance, with Japan and China leading gains while South Korea saw a slight slip.
U.S. Market: Stocks close higher on strong tech earnings
U.S. stocks closed higher on Friday, buoyed by a rally in mega-cap growth stocks following robust quarterly results from technology heavyweights Alphabet and Microsoft, in addition to moderate inflation data.
According to the U.S. Commerce Department data, monthly inflation rose moderately in March on an annual basis, aligning with estimates on a monthly basis. This offered some relief to financial markets spooked by worries of stagflation.
The S&P 500 and the Nasdaq registered their biggest weekly percentage gains since early November 2023. Benchmark S&P 500 snapped three weeks of losses, while the Nasdaq ended four straight weeks of declines.
In comparison to the previous week, both the S&P 500 and the Nasdaq Composite experienced four consecutive days of losses, largely due to underperformance in the tech sector. This trend continued, resulting in both indexes posting six consecutive days of losses by the week’s end.
The Dow Jones Industrial Average rose 0.40% to 38,239.66, the S&P 500 gained 1.02% to 5,099.96, and the Nasdaq Composite gained 2.03% to 15,927.90 during the week in view.
Alphabet’s first-ever dividend, its $70 billion stock buyback program, and better-than-expected first-quarter results propelled its shares to a 10% jump, reaching a record high and lifting the Google parent’s market value above $2 trillion.
Microsoft shares rose 1.8% after its third-quarter revenue and profit exceeded Wall Street estimates, driven by gains from artificial intelligence (AI) adoption across its cloud services.
Other mega-cap growth stocks also closed higher: Amazon.com rose 3.4%, Nvidia gained 5.8%, and Meta Platforms added 0.4%. However, Apple fell 0.3% and Tesla closed down 1.1%. On Wednesday, Meta’s results had disappointed investors even as the company increased spending on AI.
“The earnings reports of Microsoft and Google allayed a lot of the concerns about the fact that the spending on data centres and AI, which Meta had raised a day before, was going to compress margins,” Tom Plumb, president and lead portfolio manager at Plumb Funds in Madison, Wisconsin told Reuters.
Europe: Markets Close higher, regaining momentum after the previous session’s dip
European markets closed higher on Friday, regaining momentum after a dip in the previous session.
The pan-European benchmark Stoxx 600 index provisionally ended 1.2% higher, with almost all sectors and major bourses in positive territory. Construction and material stocks led the gains, up around 2.1%, while chemicals dipped 0.3%.
Major European indices closed with gains, led by the Spanish Ibex which rose 1.56% and the German DAX which rose 1.36%. The major European indices were also higher for the trading week.
For the trading week, the German DAX rose 2.39%, the France CAC rose 0.82%, the UK FTSE 100 rose 3.09%, and Spain’s Ibex rose 3.96%.
European stocks closed on a firm note on Friday with investors cheering a slew of strong earnings updates from U.S. big names Alphabet and Microsoft, and a few European companies, and shrugging of interest rate concerns for now.
French stocks rose on Friday, though overall gains remained capped ahead of the release of the Federal Reserve’s preferred inflation measure due later in the day.
Asia-Pacific Markets higher; Japan and South Korea lead gains
Japan stocks were higher at the close of trade, with gains in the Precision Instruments, Transportation Equipment, and Electrical/Machinery sectors leading shares higher. The Nikkei 225 rose 0.84%.
South Korea’s Kospi slipped 1.76%, while the small-cap Kosdaq fell 1.04%. Chinese indexes bucked the downtrend, with Hong Kong’s Hang Seng index up 0.39%, while China’s CSI 300 advanced 0.25% to finish at 3,530.28.
Investors took a breather after two straight days of rallies, mirroring moves on Wall Street. Japan’s Nikkei 225 fell 2.16% before paring losses, closing at 37,628.48, while the Topix was down 1.74% and closing at 2,663.53. The yen was trading firmly beyond the 155 mark against the greenback, at 155.63.
Conclusion
Global markets showed resilience, with U.S. stocks buoyed by strong tech earnings and moderate inflation data. European markets regained momentum, closing higher after a brief dip. Asia-Pacific markets were mixed, with Japan and China leading gains while South Korea slipped. Investors remain cautious amid ongoing geopolitical tensions and inflation concerns, closely watching central bank actions and corporate earnings.
