US indices are opening with modest gains, as market enthusiasm is driven by better-than-expected company earnings. Yesterday, strong reports were released by Microsoft and Meta. Both companies are seeing solid gains today, boosting broader market optimism.
It seems that the ongoing earnings season has briefly allowed investors to look past the ongoing trade war. However, it’s worth noting that the reported results cover the period up to March 2025 and therefore do not yet reflect the full-scale tariff hikes seen in early April. Positive sentiment is also supported by news of the U.S.–Ukraine resource agreement, seen as the beginning of further negotiations.
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The index of the 500 largest U.S. companies is gaining 0.58% today, reaching 5,660 points. Breaking through the 5,600–5,650 zone was key to returning to the consolidation range we are currently in. To maintain positive momentum, further strong earnings — especially from Amazon and Apple, expected after today’s Wall Street close — will be crucial. On the other hand, the consolidation zone may become a profit-taking area, potentially triggering a return to declines. For such a scenario to unfold, the market would likely need a catalyst such as an escalation in the trade war or notably weaker earnings in the coming days.
Company news
Microsoft (+9.50%) shares surged after strong Q3 results; Azure grew 33% (vs. expected 31%), and total cloud revenue rose 20% y/y. Outlook for Q4 and fiscal year 2026 was optimistic – Azure growth forecasted at 34–35%, with revenue guidance above consensus.
Meta Platforms (+4.75%) rose following strong Q1 results: revenue +16%, profit +35%, margin improvement. Monthly AI user count approached 1 billion. Revenue guidance for Q2 and full-year capex were raised, while operational cost forecasts were slightly lowered.
Amazon (+2.54%) gained on news of a $4B+ rural delivery expansion – over 200 new distribution points and 100,000+ new jobs. The initiative will cover 13,000 new ZIP codes and over 1 billion additional annual shipments. Q1 earnings are due after the market close today.
McDonald’s (-0.21%) reported an unexpected drop in customer traffic in Q1 – global same-store sales fell by 1%, against expectations for nearly 2% growth. In the U.S., same-store sales dropped 3.6% – the worst since 2020 – due to deteriorating consumer sentiment. Revenue declined 3% to $5.95B, missing estimates, though adjusted EPS came in slightly above expectations at $2.67.
Eli Lilly (-7.80%) reported a 45% y/y revenue increase in Q1, driven by massive demand for diabetes drug Mounjaro ($3.84B, +113%) and weight-loss therapy Zepbound ($2.31B). EPS beat expectations at $3.34 vs. the forecasted $3.02. However, the company lowered its full-year EPS forecast to $20.78–22.28 (down from $22.50–24) due to a $1.57B one-time charge related to the acquisition of an oncology drug from Scorpion Therapeutics. Revenue guidance was maintained at $58–61B.
Qualcomm (-7.30%) declined despite strong Q2 results. Revenue rose 17% y/y with solid gains in phone, automotive, and IoT segments. However, a mixed Q3 outlook may have dampened investor sentiment.
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