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US stocks rise on strong tech earnings - US jobs report in focus

US stocks climbed on Thursday, with the Dow Jones Industrial Average reaching its highest level since early April and the Nasdaq 100 climbed 1.1%, reaching its highest since late March amid strong quarterly results from Microsoft and Meta Platforms, which alleviated investor concerns about the impact of economic turmoil on the AI sector. While in Europe most markets remained closed due to the 1st May holiday, the Bank of Japan left its key interest rate unchanged and Hong Kong stocks lead Asian gains at the end of the trading week on the back of strong US tech earnings and after China announced it is considering trade talks with the US.

  • Date
  • Author Alessandro Fezzi, LGT Research Content & Publications
  • Reading time 5 minutes

US labour market report newspaper

Equity indices on Wall Street extended their recent gains on Thursday, driven by strong quarterly results from tech heavyweights Microsoft and Meta. The Dow Jones Industrial Average rose 0.2% to 40,752.96 points, its highest level since early April, while the S&P 500 gained 0.6% to 5604.14 points. The Nasdaq 100 climbed 1.1% to 19,786.71 points, reaching its highest point since late March. Despite a rise in initial jobless claims and a decline in the ISM Manufacturing Index, strong earnings from Microsoft (+7.6%), and Meta (+4.2%), overshadowed economic concerns.

US jobs report in focus: jobless claims and ADP report point to weaker employment growth

This afternoon (14:30) we expect the latest data on US employment. Yesterday, initial unemployment claims rose to 241,000 for the week ending April 26, an increase of 18,000 from the previous period. This figure exceeded expectations and marked the highest level since February. The rise in claims indicates potential economic instability. On Wednesday, ADP had reported that private payrolls in the US increased by just 62,000 in April, the smallest rise since July 2024, significantly below the anticipated 120,000. This marked a decline from the revised 147,000 jobs added in March. The leisure and hospitality sector led gains with 27,000 new positions, while education and health services lost 23,000 jobs. The slowdown is attributed to uncertainties surrounding President Trump's tariffs. Wage growth also decelerated, with a 4.5% increase for those staying in their jobs, down from March's 4.6%, according to ADP.

US Manufacturing PMI contracts further in April, while US GDP contracts in Q1

Activity in the US manufacturing sector slowed in April as the ISM Manufacturing PMI declined to 48.7 from 49 in March, remaining below the 50-threshold. In the first quarter, the US economy contracted by 0.3% annualised, raising fears of a recession. President Trump attributed the downturn immediately to the economic legacy of former President Joe Biden and defended his tariff policies, suggesting that economic growth will take time.

Hong Kong stocks lead Asian gains

Hong Kong stocks led gains in Asia on Friday after China announced it is considering trade talks with the US. The Hang Seng Index rose 1.7% and the Hang Seng Tech Index surged 3.5%. Regional markets followed Wall Street's positive trend, buoyed by strong earnings reports from US tech giants. In Tokyo, the Nikkei 225 gained 1.2% and in Seoul, the Kospi rose 0.3%.

Japan’s central bank holds rates steady

The Bank of Japan maintained its policy rate at 0.5% on Thursday, aligning with analysts' expectations. The decision comes amid heightened global trade tensions due to US President Trump's tariffs, which are impacting Japan's economic outlook. The central bank anticipates growth to moderate and inflation to range between 1.5% to 2% for the fiscal year ending March 2026. Governor Kazo Ueda noted that while tariffs will pressure the economy, the impact is expected to lessen as global economies recover.

Eurozone GDP exceeds expectations

Euro-area GDP grew by 0.4% in the first quarter, surpassing economists' expectations of 0.2%, according to preliminary data released on Wednesday. Germany's economy expanded by 0.2% over the same period, while Spain and Lithuania saw growth of 0.6%. Despite the positive start to 2025, analysts expect growth to slow due to newly introduced US tariffs. 

Corporate and economic calendar

Corporate news in focus: Quarterly figures from BASF, Chevron, Cigna, Eaton, Exxon Mobil, ING, Lonza, Shell.

Economic data in focus: Italian Purchasing Managers' Index (09:45), German Purchasing Managers' Index (09:55), euro-area Consumer Price Index (11:00), euro-area unemployment rate (11:00), US non-farm payrolls, unemployment rate, and average hourly earnings (14:30).

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Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi
Source: LGT Bank (Switzerland) Ltd.