The Nasdaq Composite Just Did This, And Here Why Investors Need to Pay Attention
Key Points
-
Stocks are rising in May with no sign of selling in sight.
-
Big Tech stocks are fueling gains after Meta and Microsoft didn’t disappoint.
Live Updates
Amazon's Ads Business Humming Along
After a tech-fueled rally on Wall Street, Amazon (Nasdaq: AMZN | AMZN Price Prediction) has revealed its Q1 results. The tech giant’s digital ads business is humming along just fine, growing 19% in the quarter to $13.9 billion, surpassing estimates. Amazon also beat on the top and bottom lines, including revenue of $155.67 billion vs. estimates of $155.04 billion. AMZN shares are lower in after market trading, down 2.6% after rising 3.1% in regular market trading.
Apple Preview
With Meta and Microsoft having breathed life back into the AI bet, the markets are awaiting the next report from Big Tech. Apple (Nasdaq: AAPL) is next up in the lineup and is expected to report its fiscal Q2 results after the closing bell today. AAPL stock has just been surpassed by Microsoft (Nasdaq: MSFT) in the market cap league tables but remains the No. 2 most valuable company in the world. The lion’s share of Apple’s products are produced in China, so the markets are anxiously awaiting any impact from the tariff wars, not least the 145% tariffs that the White House has targeted for China imports.
Tariff Fears Overblown
Citi analyst Christopher Danely published a report in response to technology earnings, putting tariff fears to rest and emphasizing the insatiable AI demand, saying, “Contrary to investors’ worries of slowing capex, it appears that spending for AI continues to be unabated. AI infrastructure buildouts remain as key priorities for hyperscalers with the companies’ willingness to absorb the costs of tariffs. We view this as positive for AI-exposed stocks.” Citi likes Broadcom (Nasdaq: AVGO), AMD (Nasdaq: AMD) and Micron (Nasdaq: MU).
Buy in May
While the new month brings with it the “Sell in May” adage, the markets are not heeding that warning currently. Instead, stocks are up across the board after Big Tech came in with the save, delivering stronger than expected earnings and lifting the market mood after yesterday’s GDP disappointment. Separately, Tesla reportedly has launched a search for a new CEO to follow in the footsteps of Elon Musk after Tesla (Nasdaq: TSLA) stock has been battered in 2025, sending a strong signal to the tech innovator that the company should be a greater priority for him. Tesla stock is relatively flat today.
Now that April is in the rearview mirror, the markets are welcoming the month of May with no selling in sight. The tech-laden Nasdaq Composite shed approximately 0.1% in yesterday’s turnaround session, far from its lows, and tacked on close to 1% for all of April. Headline risk has been dominant, but with potential tariff relief in sight, the markets are beginning to shift to fundamentals.
Meta Platforms (Nasdaq: META) and Microsoft (Nasdaq: MSFT) proved that with their Q3 earnings reports this week, shifting the mood from fear to excitement in the blink of an eye. The technology sector is leading the markets higher today, with a 3% gain as a group, while healthcare as a sector is down 2% on the day.
With the economic slowdown now having reared its head, the markets will have fresh economic data to process on Friday – April’s employment report. Economists are predicting that the labor market was relatively steady last month but also that job growth slowed from March levels. If the data matches those expectations, the markets might not revert to freefall mode as they did earlier this week. In a worrisome sign, unemployment claims ticked higher than expected last week.
Here’s a look at the performance as of morning trading:
Dow Jones Industrial Average: Up 260.62 (+0.64%)
Nasdaq Composite: Up 304.16 (+1.74%)
S&P 500: Up 58.60 (+1.05%)
Market Movers
Meta Platforms stock is up 4.2% at last check after beating Q1 earnings estimates and growing revenue 16% year-over-year thanks to an ads business that is withstanding the tariff pressure, some signs of weakness notwithstanding.
Microsoft stock is soaring by 9% on the heels of a strong Q3 earnings print, with AI demand fueling growth in its Azure business.
Discount retailer Kohl’s (NYSE: KSS) has experienced a C-Suite shakeup, with the board of directors ousting CEO Ashley Buchanan amid a mysterious conflict of interest. The company appointed an interim chief, and the stock is rising by 3% in response.
McDonald’s (NYSE: MCD) suffered its sharpest drop in same-store sales since the start of the pandemic, falling 3.6% amid a one-two punch of severe weather and a careful consumer.
General Motors (NYSE: GM) reduced its 2025 outlook amid billions of dollars in tariff exposure.
Gerelyn Terzo is the author of dividend investing handbook "Dividend Investing Strategies: How to Have Your Cake & Eat It Too." A veteran financial journalist, she covers agri-finance for outlets like Global AgInvesting and the broader stock market and personal finance for 24/7 Wall Street. She began at CNBC and later helped launch Fox Business in New York. Gerelyn currently resides in Woodland Park, Colorado and dabbles in nature photography as a hobby.
© nextheprime / Shutterstock.com
Top Gaining Stocks
Top Losing Stocks