The major U.S. index futures are currently pointing to a sharply higher open on Thursday, with stocks likely to see initial strength after recovering from an early sell-off to end the previous session mixed.
Early buying interest may be generated in reaction to upbeat earnings news from software giant Microsoft (MSFT) and Facebook parent Meta Platforms (META).
Shares of Microsoft are surging by 8.5 percent in pre-market trading after the company reported better than expected fiscal third quarter results and provided strong full-year guidance.
Meta Platforms is also seeing significant pre-market strength after reporting first quarter results that exceeded analyst estimates on both the top and bottom lines.
On the other hand, shares of Qualcomm (QCOM) may come under pressure after the chipmaker reported fiscal second quarter results that beat expectations but provided disappointing revenue guidance for the current quarter.
The positive sentiment on Wall Street may be partly offset by a report from the Labor Department showing first-time claims for U.S. unemployment benefits rose by much more than expected in the week ended April 26th.
After pulling back sharply early in the session, stocks showed a significant recovery over the course of the trading day on Wednesday. The major averages climbed well off their worst levels of the day before eventually closing mixed.
The major averages showed a strong move to the upside going into the close of trading. While the Nasdaq still ended the day down 14.98 points or 0.1 percent at 17,446.34, the S&P 500 rose 8.21 points or 0.2 percent to 5,569.06 and the Dow climbed 141.74 points or 0.4 percent to 40,669.36.
The early sell-off on Wall Street came as traders cashed in on recent strength in the markets following the release of a Commerce Department report showing the U.S. economy unexpectedly shrank in the first three months of 2025.
The Commerce Department said real gross domestic product fell by 0.3 percent in the first quarter after surging by 2.4 percent in the fourth quarter of 2024. Economists had expected GDP to rise by 0.4 percent.
The unexpected dip by GDP primarily reflected an increase in imports, which are a subtraction in the calculation of GDP.
Imports skyrocketed by 41.3 percent in the first quarter as businesses rushed to import goods before tariffs went into effect, subtracting 5.0 percentage points from GDP growth.
A decrease in government spending also weighed on GDP, while increases in investment, consumer spending and exports helped limit the downside.
Adding to the negative sentiment, payroll processor ADP released a report showing private sector employment in the U.S. increased by much less than expected in the month of April.
Selling pressure waned over the course of the session, however, with the data possibly generating some optimism about the outlook for interest rates.
"The Fed will likely hold rates steady at next week's decision given so much is unknown about the impact of tariffs and how the economy will react to them," said Bill Adams, Chief Economist for Comerica Bank. "However, a rate cut at the Fed's following meeting in June is a live possibility."
The Federal Reserve's preferred readings on consumer price inflation showed consumer prices were virtually unchanged in the month of March and the annual rate of growth slowed.
Housing stocks showed a strong move to the upside over the course of the session, driving the Philadelphia Housing Sector Index up by 1.8 percent.
Significant strength also emerged among gold stocks, with the NYSE Arca Gold Bugs Index climbed by 1.7 percent despite a decrease by the price of the precious metal.
Pharmaceutical and biotechnology stocks also moved notably higher as the day progressed, while considerable weakness remained visible among energy stocks amid a steep drop by the price of crude oil.
Commodity, Currency Markets
Crude oil futures are slumping $1.17 to $57.04 a barrel after plunging $2.21 to $58.21 a barrel on Wednesday. Meanwhile, after falling $14.50 to $3,319.10 an ounce in the previous session, gold futures are tumbling $89.10 to $3,230 an ounce.
On the currency front, the U.S. dollar is trading at 144.44 yen versus the 143.07 yen it fetched at the close of New York trading on Wednesday. Against the euro, the dollar is valued at $1.322 compared to yesterday's $1.1328.
Asia
Japanese and Australian stocks moved to the upside on Thursday, although most major markets in the Asia-Pacific region were closed for Labor Day.
Japan's Nikkei 225 Index jumped 1.1 percent to 36,452.30, extending the upward trend seen over the past several sessions amid strength among exporters and technology stocks.
The Bank of Japan wrapped up its monetary policy meeting on Thursday and announced its widely expected decision to leave its benchmark lending rate unchanged at 0.50 percent.
The bank said it would pay due attention to the global trade policies and its impact on Japan's financial and foreign exchange markets and also on its economic activity and prices.
If the outlook for economic activity and prices are realized, the bank will continue to raise the policy rate and adjust the degree of monetary accommodation, the bank said.
In its quarterly Outlook for Economic Activity and Prices report, the bank downgraded its fiscal 2025 growth outlook to 0.5 percent from 1.1 percent and the projection for the fiscal 2026 to 0.7 percent from 1.0 percent.
Australia's S&P/ASX 200 Index rose 0.2 percent to 8,145.60, closing higher for the sixth consecutive session, as gains by some technology stocks offset by weakness among mining and energy stocks
Elsewhere in region, New Zealand's benchmark S&P/NZX-50 Index surged 2.1 percent to 12,148.60, while markets in South Korea, Malaysia, Singapore, Taiwan, China, Hong Kong and Indonesia were closed.
Europe
With most major European markets closed for May Day, U.K. stocks have shown a lack of direction over the course of the trading session on Thursday.
The U.K.'s FTSE 100 Index has bounced back and forth across the unchanged line and is currently down 0.1 percent at 8,484.51.
Among individual stocks, shares of Lloyds have moved to the downside after the bank reported a nearly 7 percent decline in first quarter profits amid higher costs.
Shares of London Stock Exchange Group have also dipped despite the company reporting a 7.8 percent jump in first-quarter income on an organic basis.
Meanwhile, shares of Rolls-Royce have moved higher after the engine-maker reiterated its 2025 profit and cash flow guidance.
U.S. Economic News
A report released by the Labor Department on Thursday showed first-time claims for U.S. unemployment benefits rose by much more than expected in the week ended April 26th.
The Labor Department said initial jobless claims climbed to 241,000, an increase of 18,000 from the previous week's revised level of 223,000.
Economists had expected jobless claims to inch up to 224,000 from the 222,000 originally reported for the previous week.
The report also said the less volatile four-week moving average rose to 226,000, an increase of 5,500 from the previous week's revised average of 220,500.
At 10 am ET, the Institute for Supply Management is scheduled to release its report on manufacturing activity in the month of April. The ISM's manufacturing PMI is expected to edge down to 48.0 in April after slipping to 49.0 in March, with a reading below 50 indicating contraction.
The Commerce Department is also due to release its report on construction spending in the month of March at 10 am ET. Construction spending is expected to rise by 0.2 percent in March after climbing by 0.7 percent in February.
For comments and feedback contact: editorial@rttnews.com
May 02, 2025 12:18 ET First quarter economic growth data and the latest purchasing managers’ survey results from several major economies dominated the economics news flow this week. Quarterly GDP data from the U.S. reflected the impact of the trade tariffs announced by the Trump administration. Inflation data based on the Fed’s preferred measure also attracted attention. In Asia, the Bank of Japan was in focus as the latest interest rate decision and macroeconomic projections were announced.