US Open: Strong labor market supports equities performance 📈

Indices on Wall Street are opening on an enthusiastic note, recording gains of 1.30–1.60%. This time, the upward impulse came from strong labor market data. However, in the background, solid corporate earnings continue to play a significant role.

US500

The index is up 1.40% today, reaching 5,694 points. Prices have returned to a key consolidation zone, where increased selling pressure is possible. This zone has already marked a local peak twice in 2024. After previous breakouts, it also served as an important support level in the following months.

Source: xStation 5

Current earnings season

A 12.9% y/y rise in earnings alongside revenue growth of just 4.5% signals a significant improvement in operating margins among U.S. corporations, particularly in the technology and healthcare sectors. A clear sectoral polarization is visible, with technology and communication services leading, and energy and real estate lagging — reflecting structural changes in the U.S. economy. The 74.5% beat rate suggests analysts continue to underestimate companies’ adaptability amid the ongoing trade war.

Yesterday’s Apple results

• Projected tariff impact of $900 million in the current quarter
• Supply chain shift – most iPhones for the U.S. market will now come from India, not China
• Relocation of iPad, Mac, Apple Watch, and AirPods production to Vietnam to avoid high Chinese import tariffs
• Ongoing trade policy uncertainty – Tim Cook declined to forecast tariff impacts beyond the current quarter
• Revenue in China dropped to $16 billion, below the forecasted $16.8 billion

Amazon results

• Slight disappointment in Amazon Web Services (AWS) Q1 revenue – $29.27 billion vs. expected $29.42 billion
• AWS growth slowed to 17%, down from 18.9% in Q4 – the third consecutive quarter of missed revenue forecasts
• Q2 guidance for operating income between $13 and $17.5 billion, below expectations of $17.8 billion
• Concerns about Trump’s 145% tariffs on imports from China add uncertainty to forward guidance
• Capex up 74% year-over-year to $24.3 billion, partly allocated to data centers with AI chips

Other company news

Reddit (RDDT.US) jumped 1.60% after Q1 revenue soared 61% Y/Y (vs. 52% expected), with user growth (DAU +23%, WAU +31%) and ARPU up 23%. It posted a GAAP profit and guided Q2 revenue to $410M–$430M (+46%–53%) and adjusted EBITDA to $110M–$130M (+up to 230%).

Twilio (TWLO.US) rose 2.40% on 12% Q1 revenue growth and raised full-year organic growth to 7.5%–8.5%. It lifted 2025 free cash flow guidance to $850M–$875M and projected Q2 revenue of $1.18B–$1.19B and EPS of $0.99–$1.04.

Block (XYZ.US) dips 22% after Q1 missed expectations, mainly due to weak Cash App spend. It cut full-year gross profit guidance to $9.96B (vs. $10.18B est.) and Q2 to $2.45B (vs. $2.54B).

Roku (ROKU.US) fell 11.50% after lowering 2025 revenue forecast to $4.55B (vs. $4.61B prior) and guiding Q2 revenue to $1.09B, below expectations, citing tariffs and macro pressure.