The stock market rally had a powerful week, staging a follow-through day on Tuesday and following up with further big gains. The S&P 500 and Nasdaq moved above some key levels while a decent number of stocks flashed buy signals with many more setting up. Some positive headlines about Trump tariffs, falling Treasury yields and slightly higher odds for Fed rate cuts helped buoy the market. ServiceNow, SAP, Google-parent Alphabet, GE Aerospace and AT&T rallied on strong earnings. Tesla had dismal earnings, but shares rose on a bullish Elon Musk, who will spend less time on government work. IBM slumped on earnings.
Stock Market Rallies Strongly
The stock market staged a follow-through day, with big gains on Wednesday and Thursday, amid Trump tariff hopes, some strong earnings and more. The S&P 500 and Nasdaq reclaimed their 21-day moving averages. A sizable number of stocks flashed buy signals, with many others setting up. Treasury yields fell. Bitcoin jumped.
Soft Economic Data Getting Softer
The latest batch of data shows that hard economic data still hasn't given way, but soft data from surveys is getting softer. Initial claims for jobless benefits for the week of April 19 rose 6,000 to a still-modest 222,000. The number of people continuing to claim benefits isn't showing an uptrend, falling 37,000 to 1.841 million in the week of April 12. However, the S&P Global preliminary U.S. activity index, based on a survey of purchasing managers, fell to a 16-month low of 51.2 from 53.5 in March, but remained above the neutral 50 level.
The employment index fell to 50.8 from 51.5, also remaining in positive territory. The University of Michigan consumer sentiment index, though down sharply from March, came in slightly above the preliminary April reading. Yet long-term inflation expectations held at 4.4%, the highest since 1991. Meanwhile, various port and trucking data signaled a big looming slowdown in activity because of Trump tariffs.
Tesla Earnings Dive. Investors Cheer.
Tesla reported that Q1 EPS sank 40% while revenue fell 9%, both missing lowered views, while auto gross margins excluding regulatory tax credits hit a 13-year low. Tesla also pulled its target for delivery growth in 2025. Brand damage from CEO Elon Musk's political posts and work with the Trump White House are taking a toll while the refreshed Model Y rolled out late in the quarter. Analysts now expect Tesla earnings to fall for a third straight year. The upcoming "affordable" EV will be a scaled-down version of the Model Y or 3. However, investors cheered Musk's plan to scale back his work with President Donald Trump and Tesla's plan to launch 10-to-20 Model Y robotaxis in Austin this June. Tesla stock jumped for the week, moving above some key levels.
BYD Earnings Double, Pass Tesla
BYD reported first-quarter net income of RMB 9.16 billion ($1.26 billion), up 100.4% vs. a year earlier in local currency, beating estimates but in line with the EV giant's preliminary figure earlier in the month. Revenue grew 36.35% to RMB 170.36 billion ($23.38 billion), slightly missing. BYD's net income easily topped Tesla for the first time. Tesla reported adjusted net income of $934 million. Tesla's net income was 388% higher than BYD's in 2022, 161% in 2023 and 53% last year.
BYD stock jumped for the week, near record highs.
Google Earnings Strong
Google parent Alphabet said Q1 GAAP earnings surged 48%, easily beating, with adjusted operating margin at 40%, topping estimates of 38%. Gross revenue rose 12% to $90.2 billion, slightly above consensus. Search-ad revenue grew 10% to $50.7 billion, just beating. Google Cloud revenue swelled 28% to $12.26 billion, roughly in line. YouTube ad revenue climbed 10% to $8.93 billion, just missing. Alphabet OK'd a new $70 billion stock buyback, the same as in 2024. Shares rose strongly for the week.
Software Giants Stock Jump In Stock Market
Business software giants ServiceNow and SAP reported better-than-expected first-quarter earnings. ServiceNow EPS rose 18% while revenue grew 18.5% to $3.09 billion. Current remaining performance obligations, or CRPO, rose 22% to $10.31 billion, also slightly beating. ServiceNow forecast Q2 subscription revenue just above forecasts. SAP's Q1 adjusted earnings came in at 1.44 euros per share, up 78%. Revenue climbed 12% to 9.01 billion euros. The German software giant's cloud computing revenue rose 27% to 4.99 billion euros, just missing. SAP maintained full-year guidance. Both stocks jumped, with ServiceNow regaining its 200-day line while SAP gapped above its 50-day line, near a buy point.
GE Aerospace, Boeing Beat Views
GE Aerospace on Tuesday reported a 60% EPS gain while revenue increased 11% to $9.94 billion, both beating. Total orders increased 12%. Commercial engine and services revenue rose 14%. GE said it is offsetting impacts from tariffs by optimizing operations, leveraging existing programs, implementing pricing actions and taking measures to control costs. But the midpoint of its 2025 earnings outlook was below FactSet views. Boeing on Wednesday reported a smaller-than-expected loss while an 18% revenue gain topped. Commercial airplane revenue spiked 75%, while aircraft deliveries rose 57%. Meanwhile, Boeing is looking to resell dozens of jets or shift orders between customers to reduce tariff-related costs. CEO Kelly Ortberg confirmed that China is not taking deliveries on 50 Boeing jets for this year as earlier planned, but in the near term the Dow giant can redirect them to other customers. Both stocks jumped for the week.
Defense Earnings Mixed
Lockheed Martin beat earnings forecasts by a solid margin, while sales rose 4% to edge out estimates. CEO Jim Taiclet in the earnings news release noted that Lockheed's backlog has reached $173 billion, which represents more than two years of sales. Lockheed maintained its 2025 outlook, but that doesn't include impacts from evolving tariffs or Trump executive orders. LMT stock ticked up on the week. RTX topped earnings and revenue estimates on Tuesday. RTX's Raytheon business sales fell 5%, slightly worse than expected. The Pratt & Whitney engine division saw a 14% revenue gain, while Collins Aerospace sales rose 8%. Commercial aftermarket revenue jumped 21%. Executives expect an $850 million revenue hit in 2025 from tariffs. Full-year guidance was slightly lower. RTX stock fell solidly.
Northrop Grumman earnings fell 47% to miss expectations by a wide margin, due to a B-21 bomber loss provision, while revenue also fell short. Northrop received $10.8 billion in contract or project awards during the quarter, with its backlog climbing to a record $92.8 billion. The company reaffirmed cash flow and sales guidance for the year, but cut its EPS target. Northrop stock also fell. General Dynamics reported a 27% EPS gain while revenue climbed 14%, both beating. Shares fell slightly.
IBM Beats, But 'No One Is Immune'
IBM beat expectations with its Q1 results and affirmed its 2025 guidance, while acknowledging "no one is immune to uncertainty" as the tech giant faces potential cuts in federal contracts from DOGE. IBM's adjusted EPS fell 4% while sales grew 1% to $14.54 billion. IBM acknowledged a "couple" contracts have been cut so far because of DOGE but added that the U.S. government represents less than 5% of its total revenue. IBM's forecast guided up on Q2 revenue. But IBM stock tumbled on the report. Analysts cited decelerating sales growth in its software division, home to many of the company's AI efforts.
AT&T Wireless Gains Beat Views; Verizon, T-Mobile Don't
T-Mobile US gained 495,000 postpaid phone customers in Q1 vs. a rise of 324,000 for AT&T and a loss of 289,000 for Verizon Communications. But AT&T beat estimates while Verizon and T-Mobile did not. T-Mobile earnings grew 29% while revenue rose nearly 7% to $20.88 billion, both above consensus. Verizon earnings edged up 3% and revenue 1.5% to $33.5 billion, both slightly topping. AT&T met EPS views while a 1.5% revenue gain to $30.6 billion edged past consensus. Free cash flow slightly missed. But AT&T stock rose solidly for the week while Verizon and T-Mobile fell.
Medical Product, Systems Makers Rise
Intuitive Surgical beat Q1 views with a 21% EPS gain and 19% revenue rise. The robotic surgery stock rose despite saying additional tariffs could have a "material" impact on its 2025 financials. Boston Scientific earnings grew 34%, a third straight quarter of accelerating growth, fueled by a strong cardiovascular division. Boston also raised its full-year outlook. Edwards Lifesciences raised some parts of its full-year guidance after first-quarter earnings topped forecasts by a penny and sales came in line with projections. Penumbra also handily beat first-quarter projections, with a 102% EPS gain, increasing its forecast for U.S. thrombectomy (blood clot removal) sales to grow 20% to 21% this year. All four stocks jumped.
TI, Intel Diverge After Earnings
Texas Instruments rallied after the chipmaker's beat-and-raise first-quarter earnings report. Q1 earnings rose 7% while sales grew 11% to $4.07 billion, marking a return to growth after nine quarters of declines. Meanwhile, Intel fell after the struggling chip giant topped Q1 views but badly missed with its Q2 forecast. EPS fell 28% while sales edged lower to $12.67 billion. For the June quarter, Intel expects to break even on an adjusted basis with revenue down 8% to $11.8 billion. Intel also announced an initiative to reduce expenses and improve operations. It reportedly plans to cut more than 20% of its staff by targeting middle-management jobs.
Stock Market News In Brief
Quest Diagnostics bounded off its 50-day line on Tuesday after the lab testing behemoth topped first-quarter expectations with EPS up 8% as sales grew 12% to $2.65 billion.
GE Vernova topped first-quarter expectations with strong earnings and an 11% revenue gain. The wind and gas turbine play reaffirmed its 2025 guidance. GE Vernova has nearly sold out of gas turbine slots through 2028 and is starting to take orders into 2030, as energy demand is proving resilient to tariff and macroeconomic pressures. However, GE Vernova expects to incur $300 million to $400 million in cost increases due to Trump's tariff policies. GEV stock jumped.
3M reported a better-than-expected 10% EPS gain with revenue up 1% to $5.8 billion. The diversified maker of various industrial and medical products outlined possible tariff "sensitivity" to its full-year EPS forecast. Shares rose.
Philip Morris International reported better-than-expected first-quarter profit and sales early Wednesday. It raised its Q2 outlook as its smoke-free offerings, with the popular Zyn nicotine pouch leading the way, are set to boost volumes. Overall EPS grew 13% in Q1, with revenue up 6%.
Vertiv surged after reporting better-than-expected first-quarter sales and earnings and raising its sales outlook for the full year. The data-center infrastructure provider says it isn't seeing a slowdown in its AI data-center business.
Check Point Software Technologies said Q1 adjusted earnings rose 9%. Including acquisitions, revenue climbed 7% to $638 million. Billings, a sales growth metric, rose 7% to $553 million. All edged past views. The cybersecurity firm gave somewhat-conservative Q2 targets and left 2025 guidance unchanged. Shares fell.
Pegasystems reported Q1 adjusted earnings soared 219% while revenue swelled 44% to $475.6 million, both handily beating Wall Street targets. Shares of the software maker vaulted higher within a deep base.
Gilead Sciences share fell in the stock market Friday after the its biggest moneymaker, HIV treatment Biktarvy, missed Q1 views slightly with a 7% sales gain to $3.15 billion. Total revenue was flat at $6.67 billion, also below expectations. Adjusted earnings beat, reversing from a year-earlier loss.
