Microsoft and Meta Platforms lead Wall Street higher

NEW YORK (AP) — Microsoft and Meta Platforms are driving Wall Street higher on Thursday after profits for the Big Tech companies at the start of the year turned out to be even bigger than analysts expected.

The S&P 500 was up 0.8% and heading for an eighth straight gain, which would be its longest winning streak since August. The Dow Jones Industrial Average was up 124 points, or 0.3%, as of 9:35 a.m. Eastern time, and the Nasdaq composite was 1.9% higher.

Microsoft jumped 10.2% after the software giant said strength in its cloud computing and artificial intelligence business drove its overall revenue up 13% from a year earlier.

Meta, the parent company of Facebook and Instagram, also topped analysts’ targets for revenue and profit in the latest quarter. It said artificial intelligence tools helped boost its advertising revenue, and its stock climbed 6.4%.

CVS Health and a bevy of other companies also joined the growing stream of better-than-expected profit reports that have been helping to steady Wall Street over the last week. The S&P 500 is back to within 9% of its record set earlier this year, after briefly dropping nearly 20% below the mark.

Still, plenty of uncertainty remains about whether President Donald Trump’s trade war will force the economy into a recession. Several reports have recently shown the U.S. economy is weaker than expected, and the latest arrived Thursday showing that more U.S. workers filed for unemployment benefits last week than economists had forecast. It’s setting the stage for a more comprehensive report on the job market arriving Friday.

And even though companies have been reporting better profits for the first three months of the year than analysts expected, many CEOs are remaining cautious about the rest of the year.

General Motors cut its forecast for profit in 2025, for example. It said it’s assuming it will feel a hit of $4 billion to $5 billion because of tariffs, and it expects to offset at least 30% of it. GM’s stock slipped 0.3%.

McDonald’s fell 1.3% after reporting weaker revenue for the latest quarter than analysts expected, even though its profit was slightly above forecasts. An important underlying measure of performance at its U.S. restaurants had its worst decline since 2020, when COVID shuttered the global economy.

McDonald’s joined Chipotle and other restaurant chains that have seen customers get more cautious amid all the uncertainty about the economy and inflation that’s still higher than many people would like.

Such conditions are raising the threat of a worst-case scenario called “stagflation,” where the economy stagnates yet inflation remains high. It’s so hated because the Federal Reserve has no good tools to fix both problems at the same time. If the Fed were to try to help one problem by adjusting interest rates, it would likely make the other worse.

Some encouraging news on inflation arrived Wednesday, when a report said that the measure of inflation the Fed likes to use slowed in March.

That’s raising expectations among traders that the Fed may resume cutting interest rates later this year in order to prop up the economy. Those expectations in turn are helping to drive down Treasury yields in the bond market.

The yield on the 10-year Treasury fell to 4.14% from 4.17% late Wednesday.

In stock markets abroad, trading was closed in many countries for May Day, or international Labor Day holidays.

Tokyo’s Nikkei 225 rose 1.1% after the Bank of Japan kept its benchmark interest rate unchanged, as many investors expected.

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AP Business Writers Yuri Kageyama and Matt Ott contributed.