Tech giants like Alphabet and Microsoft made significant gains in the stock market recently. Alphabet’s shares surged by nearly 12% after announcing its first-ever dividend and a $70 billion buyback program. Microsoft also saw a 4% increase in shares post-earnings, surpassing Wall Street analysts’ expectations.
However, the broader market faced challenges with the Dow Jones dropping by 375 points and the S&P 500 and Nasdaq falling slightly. This downturn was triggered by U.S. economic data showing a slowdown in GDP growth and rising inflation concerns.
In the energy sector, Exxon Mobil’s shares declined due to earnings falling short of expectations, while Chevron managed to exceed expectations despite facing challenges in its refineries and international gas operations.
Looking ahead, traders are adjusting their expectations with the futures market pricing in only one potential rate cut this year. The Federal Reserve may adopt a cautious stance in response to persistent inflation, potentially slowing balance sheet reductions before making rate adjustments. Economic reports, particularly the March PCE reading, are expected to show continued inflation pressures that could influence the Fed’s policy decisions.
While Big Tech’s earnings provided a temporary boost, underlying economic challenges and sector-specific headwinds suggest a cautious approach to trading in the near term.