On April 24, 2025, U.S. stocks closed higher, marking a third consecutive day of gains, with technology shares leading the charge. The "magnificent seven" group of artificial intelligence-related megacaps played a significant role in boosting the Nasdaq, as investors reacted to a mixed bag of corporate earnings and monitored the ongoing U.S.-China tariff negotiations.
All three major U.S. stock indexes experienced substantial increases. The Dow Jones Industrial Average rose by 486.83 points, or 1.23%, to close at 40,093.40. The S&P 500 gained 108.91 points, or 2.03%, finishing at 5,484.77, while the Nasdaq Composite surged by 457.99 points, or 2.74%, to reach 17,166.04. The technology sector enjoyed the largest percentage gains, up 3.5%.
Investor enthusiasm was fueled by the performance of AI-powered software firm ServiceNow, which reported better-than-expected quarterly results, resulting in a 15.5% jump in its shares. Similarly, Hasbro also exceeded expectations, bolstered by the strength of its gaming segment, leading to a 14.6% increase in its stock price.
However, not all companies fared well. Shares of Procter & Gamble slid by 3.7%, and PepsiCo tumbled by 4.9%, reflecting a mixed earnings season. As of April 24, 2025, 74% of the 157 companies in the S&P 500 that have reported earnings thus far have beaten expectations. Analysts currently estimate an aggregate earnings growth of 8.9% year-on-year for the S&P 500, up from 8.0% as of April 1.
In the context of the ongoing U.S.-China trade tensions, Beijing has called for the cancellation of U.S. tariffs on Chinese goods. Comments from U.S. Treasury Secretary Scott Bessent suggested that the White House might be open to de-escalating the trade conflict, which has impacted markets significantly. Paul Nolte, a senior wealth advisor and market strategist at Murphy & Sylvest, noted, "Easing tariff rhetoric is part of the reason why you're seeing the chips lead because they've been kind of in the bull's eye in the trade dispute between China and the U.S."
As the first-quarter earnings season progresses, the extent to which trade war uncertainties have affected business and consumer sentiment is becoming clearer. The market's reaction to these developments highlights the fine balance investors are trying to navigate.
In a separate but related development, Intel Corporation, under the newly appointed CEO Lip-Bu Tan, is set to release its first quarterly earnings report on the same day. Tan, who took over in mid-March 2025, has already made headlines by acknowledging the company's shortcomings in a recent keynote address. Investors are keenly awaiting the earnings report, especially after a rough year for Intel and its stock, which saw the previous CEO, Pat Gelsinger, retire in December 2024.
Intel's recent announcement about selling a 51% stake in its Altera programmable chips unit to Silver Lake has generated interest, although discussions regarding a potential chipmaking joint venture with Taiwan Semiconductor Manufacturing Co. (TSMC) have been downplayed by TSMC's CEO, C.C. Wei, who stated, "TSMC is not engaged in any discussion with other companies regarding any joint venture, technology licensing or technology transfer and sharing."
Wall Street analysts project Intel will report revenues of $12.3 billion and an adjusted net income of $41.6 million for the most recently completed quarter. The mean target price for Intel's stock is just under $23, representing a roughly 10% premium to its closing price of $20.59 on the previous day. Ahead of the earnings report, Intel's stock was up about 2%, reflecting cautious optimism among investors.
As the market digests these earnings reports and news from the trade front, the overall sentiment appears cautiously optimistic. The favorable performance of technology stocks, combined with a potential thawing of U.S.-China trade tensions, could lead to further gains in the coming days. However, analysts remain vigilant, noting that many uncertainties still loom, particularly regarding tariffs and their impact on the technology sector.
In summary, U.S. stocks are experiencing a rally, driven largely by the technology sector's performance amidst mixed corporate earnings. As investors keep a close eye on trade negotiations and company earnings, the market's direction remains to be seen, with both opportunities and challenges ahead.
