Stocks Eye Best Month Since 2020 on Strong Economy: Markets Wrap
(Bloomberg) — Signs of strength in the world’s largest economy fueled optimism about the outlook for Corporate America, driving stocks toward their best month since 2020. Bonds rose. Oil fell from a four-year high.
In the final stretch of April, the S&P 500 climbed after data showed US growth accelerated at the start of the year, fueled by a massive upswing in business investment and solid consumer demand. The report pointed to an economy that is better positioned to withstand the fallout from the Middle East conflict that has caused an energy crunch and disrupted global supply chains.
Inflation-adjusted gross domestic product increased an annualized 2% in the first quarter, consumer spending increased at a better-than-expected rate while business outlays on equipment and structures soared, supported by rapid investment in artificial intelligence.
“Tech spending shows no sign of slowing down during the AI revolution, and is doing the heavy lifting in the current US economy,” said Art Hogan at B. Riley Wealth.
A frenzied week of earnings reports offered a glimpse at how some of the world’s biggest tech companies are doing in artificial intelligence. The upshot: Alphabet Inc.’s Google is seeing a clear payoff from its AI spending, while Meta Platforms Inc. is lagging behind. Apple Inc. is due to report results after the close.
Separate data showed applications for US unemployment benefits plunged to the lowest level in decades, a sign that job-cut announcements have not yet meaningfully translated into layoffs.
Meantime, the Federal Reserve’s preferred measure of inflation — the personal consumption expenditures price index — rose 0.7% last month, the most since 2022.
“Solid growth and no sign of fracture in the labor market left stubborn inflation as the morning’s economic headline,” said Ellen Zentner at Morgan Stanley Wealth Management. “While ‘stubborn’ isn’t the same as ‘resurgent,’ as long as oil prices remain near their four-year highs, inflation will remain front of mind in the markets and keep the Fed on the sidelines.”
Elsewhere, the yen climbed as traders speculated Japan is intervening in the foreign-exchange market, hours after officials delivered a “final” warning to investors against selling the currency.
Corporate Highlights:
Caterpillar Inc. posted first-quarter earnings that beat Wall Street expectations on strong sales of construction machinery and equipment used to generate electricity for artificial intelligence data centers. Mastercard Inc.’s earnings beat estimates as spending climbed in the first three months of the year. Eli Lilly & Co. surprised Wall Street by raising its annual sales and profit forecast, as demand for obesity medications soared and thousands of patients started taking its new weight-loss pill before advertising for the drug had even begun. Merck & Co. reported first-quarter sales that beat Wall Street estimates as demand ramps up for newer products like Winrevair and an injectable version of cancer blockbuster Keytruda. Bristol Myers Squibb Co.’s quarterly profit and sales beat Wall Street’s expectations, a sign of strength in the drugmaker’s business as it awaits the results of closely watched clinical trials that will determine its future. Royal Caribbean Cruises Ltd.’s outlook for the year suggests it will be able to weather headwinds such as higher fuel costs and disruptions on its Middle Eastern itineraries. Hershey Co. posted first-quarter sales and profit that beat Wall Street expectations, helped by higher prices. Some of the main moves in markets:
Stocks
The S&P 500 rose 0.4% as of 9:30 a.m. New York time The Nasdaq 100 rose 0.4% The Dow Jones Industrial Average rose 0.5% The Stoxx Europe 600 rose 0.8% The MSCI World Index rose 0.5% Currencies
The Bloomberg Dollar Spot Index fell 0.5% The euro was little changed at $1.1688 The British pound rose 0.3% to $1.3509 The Japanese yen rose 2.3% to 156.66 per dollar Cryptocurrencies
Bitcoin rose 0.6% to $76,110.1 Ether rose 0.7% to $2,256 Bonds
The yield on 10-year Treasuries declined five basis points to 4.38% Germany’s 10-year yield declined six basis points to 3.05% Britain’s 10-year yield declined seven basis points to 5.00% Commodities
West Texas Intermediate crude fell 1.9% to $104.87 a barrel Spot gold rose 1.9% to $4,632.20 an ounce ©2026 Bloomberg L.P.
