Stocks end higher on tech boost as Apple and Amazon beat expectations

While the Apple results were better than analysts had expected, investors are focused on how tariff concerns will play out in the coming quarter. 

Wall Street stocks rallied as solid earnings from big tech bolstered investor risk appetite.

All three major US stock indexes began the month with solid gains, with upbeat quarterly results from Meta Platforms and Microsoft benefiting the Nasdaq most, sending the tech-laden index up 1.5%.

The bellwether S&P 500 extended its run of gains to eight consecutive sessions, marking its longest winning streak since August 2024.

It means US stocks have now largely recovered from the plunge they suffered after US President Donald Trump announced his 'Liberation Day' tariffs on much of the world, most of which he subsequently rolled back.

Apple last reported results that narrowly beat Wall Street expectations as consumers stocked up on iPhones amid fears of potential import taxes on its signature device.

The company said its sales and profit for the fiscal second quarter ended March 29 were $95.36bn (€84.6bn) and $1.65 per share, respectively, compared with analyst estimates of $94.68bn (€84bn) and $1.63 per share, according to LSEG data. Sales of iPhones were $46.84bn (€41.5bn), compared with estimates of $46.17bn.

While the results were better than analysts had expected, investors are focused on how tariff concerns will play out in the coming quarter. 

Publishing their results, Amazon.com forecast second-quarter revenue largely above estimates, in a reassuring sign the e-commerce giant would navigate tariff-related uncertainty, but growth in its closely watched cloud unit lagged.

Amazon Web Services, the company's cloud unit, is showing signs of weakness, with revenue growth of 17% to $29.27bn (€26bn) missing expectations of a 17.4% growth.

AWS, the largest cloud provider, lagged No. 2 player Microsoft, which reported blowout cloud numbers on Wednesday, as well as Google Cloud which reported revenue just shy of Wall Street expectations.

Amazon reported total revenue of $155.7bn (€138.1bn) for the first quarter ended March 31, compared with analysts' estimate of $155.04bn (€137.5bn), according to data compiled by LSEG.

The company expects net sales between $159bn (€141bn) and $164bn (€145.4bn) for the second quarter, compared with analysts' average estimate of $160.91bn (€142.7bn), according to data compiled by LSEG.

Website Reddit forecast second-quarter revenue above Wall Street estimates, betting on growing digital ad spend on the social media platform despite uncertainty over marketing budgets resulting from the ongoing trade war.

It expects current-quarter revenue to be between $410m (€363.5m) and $430m (€381.3m), compared with the analysts' average estimate of $395.5m (€350.7m), according to data compiled by LSEG.

In contrast, smaller rival Snapchat owner Snap said that it would not issue a quarterly forecast due to economic uncertainty, as advertisers favour bigger platforms in tough times.

Rental platform Airbnb forecast second-quarter revenue largely below estimates and signalled softening demand in the US as an erratic trade policy hammers consumer sentiment and sparks worries over growth.

The company expects second-quarter revenue between $2.99bn (€2.7bn) and $3.05bn (€2.7bn), the midpoint of which is below analysts' estimates of $3.04bn (€2.7bn), according to data compiled by LSEG.

Over the last two months, Delta Airlines warned travel demand has "largely stalled" while hotel operator Hilton indicated travellers were in a "wait-and see" mode, as President Trump's on-again off-again tariffs take a toll.

On the US economic front, data shows the country's factory activity remained in contraction, while jobless claims increased more than analysts expected.

Reuters