Meta and Microsoft fuel tech surge 01/05/2025

HOT stories for today

 

US market wrap:
 

• U.S. stocks finished Tuesday in positive territory after Commerce U.S. equities closed out Wednesday on a mixed note, with the S&P 500 and Dow Jones Industrial Average inching higher, while the Nasdaq Composite edged slightly lower. The S&P 500 logged its seventh consecutive daily gain, marking its longest rally since November 2024. Despite the uptick, April proved to be the most volatile month for the S&P 500 since March 2020, according to Dow Jones Market Data, with heightened intraday swings reflecting market unease. Investors remain rattled by the impact of escalating trade tensions, as fresh economic data adds to concerns.
• The Bureau of Economic Analysis reported a 0.3% contraction in U.S. GDP for the first quarter, renewing fears that tariffs are weighing on growth. President Trump responded on Truth Social, blaming the economic dip on the Biden administration. Yet, in a twist of market irony, stocks managed to close in the green—another example, some say, of Trump’s unpredictable “art of the deal.” Later in the day, Nvidia CEO Jensen Huang appeared at the White House, voicing support for government-backed AI infrastructure initiatives. Meanwhile, Bloomberg reported that European officials are preparing to present new trade proposals to Washington as early as next week.
   

Meta and Microsoft fuel tech surge
 

• Meta delivered a strong first quarter, beating expectations with $6.43 EPS and $42.3B in revenue, while reporting a 35% jump in net income. However, the company raised its 2025 capital expenditure outlook to $64–72B, driven by rising AI infrastructure costs and supply chain pressures. Meta also flagged regulatory risks in Europe, warning that a recent EU ruling on its no-ads subscription model could hit revenue as early as Q3. CEO Mark Zuckerberg said monetization of Meta AI and Threads is on the horizon, but won’t be a focus until at least next year.
• Microsoft (MSFT) shares soared 9% after the company issued a bullish Q4 forecast, projecting up to $74.25 billion in revenue and 34–35% Azure growth—above expectations. CEO Satya Nadella reaffirmed plans to invest $80 billion in AI infrastructure next fiscal year, even as looming tariffs raise cost uncertainties. The company also flagged potential AI capacity constraints beyond June due to stronger-than-expected demand, signaling continued momentum in cloud and AI services.

Stocks on the move:

• Amazon (AMZN) — Shares of the e-commerce giant climbed over 2% after the company announced a planned $4 billion investment to expand its last-mile delivery infrastructure in rural and smaller communities.
• MGM Resorts (MGM) — The casino operator rose nearly 3% as Q1 adjusted earnings came in at 69 cents per share, beating LSEG estimates of 46 cents. However, revenue slightly missed, totaling $4.28 billion versus the expected $4.30 billion.
• Robinhood (HOOD) — Despite posting better-than-expected Q1 results, Robinhood stock slipped slightly, down under 1%. The trading platform reported 37 cents EPS on $927 million in revenue, ahead of LSEG forecasts of 33 cents and $923 million, respectively.
• Qualcomm (QCOM) — Shares dropped 6% after the chipmaker issued a soft Q3 revenue forecast of $10.3 billion, just shy of the $10.35 billion consensus. The weaker guidance overshadowed otherwise solid second-quarter earnings and revenue beats.
   

Today’s action

• The Bank of Japan left interest rates unchanged for the second consecutive meeting Thursday, citing growing uncertainty as U.S. trade tensions escalate under President Trump’s sweeping tariffs—posing fresh risks to Japanese exports. Asian markets saw mixed action in a holiday-thinned session. Japan and Australia advanced following overnight volatility on Wall Street, where investor sentiment was shaken by weaker-than-expected U.S. GDP data, fueling recession concerns. Markets in South Korea, Hong Kong, China, and India were closed for Labor Day.
• In the U.S., stock futures rose on the back of strong earnings from two Big Tech heavyweights. Dow futures gained 138 points (0.3%), while S&P 500 and Nasdaq 100 futures advanced 0.8% and 1.3%, respectively. Investors now turn to earnings reports from CVS Health, Eli Lilly, McDonald’s, Apple, and Amazon, along with key economic data—including weekly jobless claims, a manufacturing readout, and Friday’s all-important nonfarm payrolls report.

Watchlist: META, MSFT, HOOD, QCOM, CVS, LLY, MCD, AMZN, AAPL
 

Bitcoin
 

• Bitcoin (BTC) edged lower Thursday as the U.S. economy posted a 0.3% contraction in the first quarter, reflecting the fallout from President Trump’s sweeping global tariffs. The cryptocurrency dipped 1.48% to trade at $93,721, despite holding a 0.75% gain for the week. BTC moved within a narrow daily range between $92,980 and $95,485.
• While price action remained muted, 24-hour trading volume surged 26% to $30.67 billion, signaling increased activity. Bitcoin’s market cap declined slightly to $1.86 trillion, though its dominance over the broader crypto space rose to 64.75%, according to TradingView.
  Watchlist: Bitcoin: 74 000-100 000, Ethereum:1500-2600, Solana: 80-150
   

Forex

• The Japanese yen extended its slide for a third consecutive day on Thursday after the Bank of Japan left interest rates unchanged at 0.5% and cut its GDP and inflation forecasts, citing uncertainty from U.S. tariffs. The dovish tone weighed on the yen, with USD/JPY pushing back toward the 144.00 level during the Asian session. Investors now await Governor Ueda’s remarks for signals on the future rate path.
• Meanwhile, the euro edged lower, with EUR/USD slipping to around 1.1325, as fresh inflation data from the Eurozone reinforced expectations of continued rate cuts by the European Central Bank. A stronger U.S. dollar, bolstered by demand following weaker-than-expected Q1 GDP data, also pressured the pair. Traders now look to Thursday’s ISM Manufacturing PMI from the U.S. for further direction, while most global markets remain closed for Labor Day.
  Watchlist: EUR/USD: 1.0700-1.1600, USD/JPY: 140-144

Basic Materials
 

• WTI crude dipped to $57.80 in Thursday’s Asian session, extending losses after its worst monthly decline since November 2021. Despite a reported 2.7 million-barrel drop in U.S. stockpiles last week (EIA), oil remains under pressure as Saudi Arabia signals higher production to support its economic agenda, adding to global oversupply concerns.
• Meanwhile, gold (XAU/USD) extended its decline for a third straight session, falling to a two-week low around $3,230, weighed down by easing U.S.–China trade tensions and a stronger U.S. dollar. While aggressive Fed rate cut expectations may cap further USD strength, safe-haven demand for gold continues to wane.
  Watchlist: GOLD 2600-3500, US Oil: 57.00-70.00

Key Economic Events Today:

EST time
08:30 am: USD Unemployment Claims
09:45 am: USD Final Manufacturing PMI
10:00 am: USD ISM Manufacturing PMI
10:00 am: USD ISM Manufacturing Prices
10:00 am: USD Construction Spending

Earnings

BMO (Before the US Market opens)
KKR         KKR & Co
MA           Mastercard Inc.
MCD        McDonald’s Corp.
LLY          Eli Lilly and Company
AMC (After the US Market closes): AMZN, AAPL, AMGN, MSTR

The TEFS Analyst team wishes you a successful day!