Stock Market Update

[BRIEFING.COM] The S&P 500 (+0.5%), Nasdaq Composite (+0.3%), and DJIA (+1.4%) are climbing to session highs early in the afternoon amid a wave of earnings-backed enthusiasm. Strength is broad, with nine S&P 500 sectors trading higher as some of the market's largest components drive impressive gains today.

Currently, the communication services sector (+2.9%) holds the widest gain as Alphabet's (GOOG 376.42, +29.11, +8.38%) results decisively surpassed expectations across every major segment, fueled by accelerating AI-driven demand and operating leverage. Alphabet's gain is enough to offset weakness in Meta Platforms (META 607.98, -61.14, -9.14%), which trades lower after topping earnings estimates, but issuing just in-line Q2 guidance while aggressively increasing its FY26 capital expenditure plans.

The industrials sector (+2.4%) holds a similar gain, supported by a blowout earnings report from Caterpillar (CAT 893.52, +83.47, +10.30%), which contributes to the outperformance of the DJIA today.

The health care sector (+2.3%) rounds out the top movers, with Eli Lilly (LLY 936.42, +85.21, +10.01%) surging after a decisive earnings beat of its own that was powered by a 125% increase in Mounjaro sales.

Weakness is limited to the information technology (-1.1%) and consumer discretionary (flat) sectors today.

The technology sector slips as capital expenditure concerns weigh on Microsoft (MSFT 399.69, -24.77, -5.84%) despite a solid earnings beat, while NVIDIA (NVDA 200.57, -8.68, -4.15%) gives back its gain for the week. Still, the sector is off its worst levels amid strength in its other semiconductor components, with Qualcomm (QCOM 178.23, +22.23, +14.25%) surging after an earnings beat and Teradyne (TER 351.51, +45.18, +14.75%) rebounding after a sharp sell-off yesterday that followed disappointing guidance.

Meanwhile, the consumer discretionary sector (flat) is limited due to Amazon (AMZN 259.40, -3.64, -1.38%) reversing its immediate post-earnings gain.

Altogether, earnings are providing a meaningful tailwind for the market even as some of its largest components face pressure due to capital expenditure concerns tied to the AI investment cycle. Following the latest batch of earnings, the S&P 500 now has a Q1 blended growth rate of 26.2%, according to FactSet. Solid, broad-based gains have the index once again within striking distance of its recent record highs.

Reviewing today's data:

• Q1 GDP-Adv. 2.0% (Briefing.com consensus 2.1%); Prior 0.5%, Q1 Chain Deflator-Adv. 3.6% (Briefing.com consensus 3.3%); Prior 3.7%
  • The key takeaway from the report is that the growth was driven by gross private domestic investment, which contributed 1.48 percentage points, and personal consumption expenditures, which contributed 1.08 percentage points to the GDP increase. Not to be overlooked, though, is that the PCE price index was up 4.5%, while the core PCE price index was up 4.3%.
• March Personal Income 0.6% (Briefing.com consensus 0.4%); Prior was revised to 0.0% from -0.1%, March Personal Spending 0.9% (Briefing.com consensus 0.4%); Prior was revised to 0.6% from 0.5%, March PCE Prices 0.7% (Briefing.com consensus 0.6%); Prior 0.4%, March PCE Prices - Core 0.3% (Briefing.com consensus 0.3%); Prior 0.4%
  • The key takeaway from the report is that spending has remained solid in the face of stubbornly high inflation—a dynamic that is going to leave the Fed disinclined to cut rates.
• Q1 Employment Cost Index 0.9% (Briefing.com consensus 0.8%); Prior 0.7%
  • The key takeaway from the report is that the increase in wages and salaries for civilian workers over the last 12 months (3.4%) is barely running ahead of inflation.
• Weekly Initial Claims 189K (Briefing.com consensus 217K); Prior was revised to 215K from 214K, Weekly Continuing Claims 1.785 mln; Prior was revised to 1.808 mln from 1.821 mln
  • The key takeaway from the report is the strikingly low number of initial claims. That just isn't consistent with a labor market that is falling apart—far (very far) from it.
• April Chicago PMI 49.2 (Briefing.com consensus 52.4); Prior 52.8