Wall Street Recovers Amid Strong Earnings and Tech Rally
This week, Wall Street made a strong comeback, driven by positive earnings from Microsoft (MSFT) and Meta Platforms (META). Their results not only reignited enthusiasm around artificial intelligence (AI) but also boosted chip stocks like Nvidia (NVDA). This rally helped the market overcome a third consecutive monthly loss and initial recession worries. Trade tensions persist, particularly with China, though there are potential developments involving India.
Economic data presented a mixed picture. Notably, GDP unexpectedly contracted, and consumer confidence hit its lowest point in almost five years. However, the week ended on a positive note with encouraging jobs data. By Friday, all three major benchmarks are up and trending towards a second consecutive weekly gain. The Dow is eyeing its longest streak since 2023, while the SPX is set for its best performance in over 20 years.
Tech Giants Post Strong Earnings, Tariff Concerns Remain
Microsoft and Meta Platforms surged following strong earnings reports, boosting the broader market and easing concerns about a slowdown in AI spending. Conversely, Apple (AAPL) experienced a decline despite exceeding fiscal second-quarter expectations, as CEO Tim Cook cautioned that tariffs could lead to an unpredictable long-term impact on their products. Amazon.com stock rebounded from early losses after reporting strong results, although a cautious outlook due to tariff-related uncertainty tempered investor excitement.
In contrast, Super Micro Computer (SMCI) fell sharply after it cut its fiscal third-quarter profit and revenue guidance due to order delays that could defer up to $1.4 billion in sales to future quarters. McDonald’s (MCD) dropped after failing to meet revenue estimates, marking its second consecutive quarter with declining U.S. same-store sales, which it attributed to adverse weather and cautious consumer behavior. First Solar (FSLR) also tumbled after missing earnings expectations and lowering its full-year guidance, citing tariffs as a key economic headwind.
Key Stocks to Monitor in May
As May begins, several stocks stand out for attention. Opera (OPRA), recognized as one of Schaeffer’s Top 2025 picks, rose for a fifth consecutive session after reporting strong earnings and increasing its full-year forecast. Plug Power (PLUG) attracted interest from options traders following positive revenue guidance and a significant financing agreement. Additionally, Applied Materials (AMAT) and Broadcom (AVGO) are worth watching due to their historically strong performance in May, while IBM (IBM) is signaling bullish trends after a pullback from recent highs.
Looking Ahead: Key Events for the Upcoming Week
The first full week of May presents a tighter economic calendar, yet market-moving events are on the horizon. The Federal Reserve’s two-day meeting concludes on Wednesday, followed by comments from Fed Chair Jerome Powell, which may influence interest rate expectations. Investors will also evaluate earnings from Advanced Micro Devices (AMD), Walt Disney (DIS), and others. Meanwhile, Schaeffer’s Senior Quantitative Analyst Rocky White will discuss strategies for the adage “sell in May and go away,” while Senior V.P. of Research Todd Salamone will assess a developing SPX support floor that may shape the market’s next steps.
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