Markets Recover Slightly as Economic Indicators Show Stability

Wednesday, April 30, 2025

Markets rebounded from early losses as they closed mixed across the major indexes: the Dow gained +141 points, or +0.35%; the S&P 500 rose +8 points, or +0.15%; the Nasdaq fell -15 points, or -0.09%; and the small-cap Russell 2000 dropped -9 points, or -0.46%. Initially, bond yields appeared poised to rise but settled down to +4.16% for the 10-year and +3.61% for 2s.

PCE Stays Stable in March: Headline & Core at 0.0%

The most significant economic report today, outside of employment data, was the March Personal Consumption Expenditures (PCE). Known for informing the Federal Reserve’s economic outlook, headline month-over-month PCE registered at 0.0%, matching expectations and reflecting a decrease of 30 basis points from the prior month. Year-over-year, headline PCE hit +2.3%, slightly above forecasts but 40 basis points lower than February’s revised +2.7%.

Core PCE, which excludes volatile food and energy prices, showed no variation in the month-over-month measurement, also at 0.0%. This number was down from a projected +0.1% and the previous month’s +0.4%. On a year-over-year basis, core PCE came in at +2.6%, aligning with expectations but down from the revised +3.0% from the month before. Such steady readings are notably close to the Fed’s target inflation level of +2.0%.

Pending Home Sales Surge to Highest Level in Six Months

Following last week’s unexpected rise in New Home Sales—where 724K seasonally adjusted annualized units surpassed the 685K estimate and previous month’s 674K—Pending Home Sales reported impressive results this morning. March figures showed a jump of +6.1%, exceeding expectations of +1% and the upwardly revised +2.1% in February. This reading marks the highest level since a +7.5% increase back in September of last year.

The South led the charge with a remarkable +9.8% increase, while the Midwest followed at +4.9% and the West at +4.8%. In contrast, the Northeast experienced a slight decline of -0.5%. Given the challenges the housing market has faced in recent years, these signs of recovery are encouraging.

Q1 Earnings Overview: Microsoft, Meta, and Qualcomm

Meta Platforms (META) outperformed estimates with its Q1 report released after the market closed. The company reported earnings of $6.43 per share, significantly surpassing the expected $5.22, while revenues reached $42.31 billion, exceeding the projected $41.22 billion. Additionally, Daily Active People (DAP) increased by +6% year over year, reaching 3.43 billion across its various platforms. The high end of guidance for the next quarter’s revenue is pegged at $45.5 billion, well above analysts’ expectations of $43.3 billion.

Microsoft (MSFT) also reported better-than-expected results, with earnings rising +18% year over year to $3.46 billion, overshooting the $3.20 billion estimate and the $2.94 per share from the same period last year. Revenues reached $70.1 billion, well above the forecasted $68.4 billion. Azure cloud sales contributed significantly, growing +20% to $42.4 billion. The company has had just one earnings miss in the last five years.

Qualcomm (QCOM), meanwhile, met estimates with fiscal Q2 earnings of $2.85 per share on revenues of $10.83 billion, exceeding the Zacks consensus of $10.67 billion. However, a lowered revenue forecast for Q3 resulted in a -6.3% decline in after-market share prices.

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