The major U.S. index futures on the Dow Jones, S&P and Nasdaq are currently pointing to a sharply higher open on Thursday, with stocks likely to see initial strength after recovering from an early sell-off to end the previous session mixed.
Early buying interest may be generated in reaction to upbeat earnings news from software giant Microsoft (NASDAQ:MSFT) and Facebook parent Meta Platforms (NASDAQ:META).
Shares of Microsoft are surging by 8.5 percent in pre-market trading after the company reported better than expected fiscal third quarter results and provided strong full-year guidance.
Meta Platforms is also seeing significant pre-market strength after reporting first quarter results that exceeded analyst estimates on both the top and bottom lines.
On the other hand, shares of Qualcomm (NASDAQ:QCOM) may come under pressure after the chipmaker reported fiscal second quarter results that beat expectations but provided disappointing revenue guidance for the current quarter.
The positive sentiment on Wall Street may be partly offset by a report from the Labor Department showing first-time claims for U.S. unemployment benefits rose by much more than expected in the week ended April 26th.
After pulling back sharply early in the session, stocks showed a significant recovery over the course of the trading day on Wednesday. The major averages climbed well off their worst levels of the day before eventually closing mixed.
The major averages showed a strong move to the upside going into the close of trading. While the Nasdaq still ended the day down 14.98 points or 0.1 percent at 17,446.34, the S&P 500 rose 8.21 points or 0.2 percent to 5,569.06 and the Dow climbed 141.74 points or 0.4 percent to 40,669.36.
The early sell-off on Wall Street came as traders cashed in on recent strength in the markets following the release of a Commerce Department report showing the U.S. economy unexpectedly shrank in the first three months of 2025.
The Commerce Department said real gross domestic product fell by 0.3 percent in the first quarter after surging by 2.4 percent in the fourth quarter of 2024. Economists had expected GDP to rise by 0.4 percent.
The unexpected dip by GDP primarily reflected an increase in imports, which are a subtraction in the calculation of GDP.
Imports skyrocketed by 41.3 percent in the first quarter as businesses rushed to import goods before tariffs went into effect, subtracting 5.0 percentage points from GDP growth.
A decrease in government spending also weighed on GDP, while increases in investment, consumer spending and exports helped limit the downside.
Adding to the negative sentiment, payroll processor ADP released a report showing private sector employment in the U.S. increased by much less than expected in the month of April.
Selling pressure waned over the course of the session, however, with the data possibly generating some optimism about the outlook for interest rates.
“The Fed will likely hold rates steady at next week’s decision given so much is unknown about the impact of tariffs and how the economy will react to them,” said Bill Adams, Chief Economist for Comerica Bank. “However, a rate cut at the Fed’s following meeting in June is a live possibility.”
The Federal Reserve’s preferred readings on consumer price inflation showed consumer prices were virtually unchanged in the month of March and the annual rate of growth slowed.
Housing stocks showed a strong move to the upside over the course of the session, driving the Philadelphia Housing Sector Index up by 1.8 percent.
Significant strength also emerged among gold stocks, with the NYSE Arca Gold Bugs Index climbed by 1.7 percent despite a decrease by the price of the precious metal.
Pharmaceutical and biotechnology stocks also moved notably higher as the day progressed, while considerable weakness remained visible among energy stocks amid a steep drop by the price of crude oil.
Dow Jones, S&P, Nasdaq, Upbeat Microsoft, Meta Earnings May Spark Initial Surge On Wall Street
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