Market Wrap: Q1 GDP Shrinks 0.3%; S&P 500 Marks 7-Day Rally as Meta, Microsoft Beat Estimates - Wednesday, 30th April
Economic Data Releases
- 8:15 AM ET - ADP Employment Report (April) Forecast: 110,000 | Previous: 155,000 | Actual 62,000
- 8:30 AM ET - GDP (Q1 2025) Forecast: 0.4% | Previous: 2.4% | Actual -0.3%
- 10:00 AM ET - Core PCE Price Index (March) Forecast: 0.1% | Previous: 0.4 % | Actual 0.0%
Markets opened deeply lower Wednesday after a string of weak economic reports fuelled concerns about the potential for a slowdown in the U.S. economy. The U.S. GDP fell by an annualized 0.3% in the first quarter, its first fall since 2022 and a steep reversal from the 2.4% rise of the last quarter. It was spearheaded by a spike in imports before President Trump's tariffs and a deceleration in consumer spending. The ADP Employment Report exacerbated the nervousness, as 62,000 private-sector jobs were created in April.
The Fed's preferred inflation measure, the core PCE price index, was steady in March—the weakest reading since nearly five years ago. Year over year, core PCE slowed to 2.3% from 2.7%, spurring hopes among investors that the Federal Reserve could turn towards rate cuts later in the year if economic weakness persists. Wall Street closed largely higher across the board, extending a multi-session rally into the end of the month, despite the presence of more macroeconomic headwinds.
Charging Bull Photo by fabio Spano on Unsplash
Meta Beats Earnings
- Revenue: Est. $41.38B | Actual $42.31B
- EPS: Est. $5.27 | Actual $6.43
Meta Platforms saw good first-quarter numbers with an earnings-per-share figure of $6.43 on revenue of $42.31 billion—both significantly more than expected. The upbeat report propelled shares nearly 4% higher in after-hours trading and illustrated the firm's continued traction in digital ads amidst trade-policy angst and broader tech industry jitters. Meta raised its 2025 capital expenditure forecast to a range of $64 billion to $72 billion, up from its previous estimate of $60 billion to $65 billion.
Meta CFO Outlook Commentary
We expect second quarter 2025 total revenue to be in the range of $42.5-45.5 billion. Our guidance assumes foreign currency is an approximately 1% tailwind to year-over-year total revenue growth, based on current exchange rates.
Microsoft Beats Earnings
- Revenue: Est. $68.4B | Actual $70.07
- EPS: Est. $3.21 | Actual $3.46
Microsoft posted a stellar quarter with a 13% year-on-year revenue growth to $70.1 billion and adjusted profit of $3.46 a share, toppling analyst predictions. Azure, the company's cloud computing business, continued on its hot streak with 33% growth—a testament to Microsoft's strategic head start in the enterprise AI space. Shares increased 6% in after-market trading, with investors welcoming the strong results against a turbulent macro backdrop. Despite tariff uncertainty and its year-to-date decline in stock, Microsoft's earnings sustained confidence in its underlying growth drivers.
Write a comment ...