Dow Jones expected to build on gains as earnings impress
8am: Mixed start expected
The Dow Jones is set to build on Thursday’s gains when trading gets underway as solid company earnings continue to offset concerns about the ongoing conflict in the Middle East, now entering its 60th day.
Dow Jones futures indicate a 0.3% rise, while those for the S&P 500 are up 0.1%. Nasdaq futures are down 0.2%.
Thursday’s close marked the end of the best month for US stocks since 2020, with gains driven by economic data and Big Tech earnings. The Dow Jones rallied 1.6%, the S&P 500 added 1%, and the Nasdaq was up 0.9%.
“The latest US earnings season has been robust, which has helped prevent global markets from suffering big losses despite the impact of the Iran conflict,” commented AJ Bell investment director Russ Mould. “But oil prices remaining above $110 per barrel are a reminder of the stakes for the global economy and the fact that there looks to be no path to the Strait of Hormuz reopening in the near term.
Apple Inc (NASDAQ:AAPL, XETRA:APC) released numbers after Thursday’s close, sending its shares 2.8% higher in after-hours trade.
Revenue came in at $111.18 billion for the March quarter, up 17%, beating forecasts of $109.46 billion. Earnings per share of $2.01 also came in ahead of estimates.
Growth was driven by iPhone and Services, with handset revenue rising 22% to $57 billion. China was a standout, with revenue in the region climbing 28% to $20.5 billion, a sharp turnaround from recent quarters when it had weighed on performance.
“Apple is taking a different approach to AI than its hyperscaler peers,” Mould added. “It is spending much smaller sums and turning to partnerships instead of trying to take a lead in the artificial intelligence arms race.
“Time will tell if this plan pays off, but what some have dubbed the ‘Switzerland’ strategy, allowing users of its devices to choose the AI tools they want to use, does mean the cash outflows are significantly lower.”
Meanwhile, in the UK, London’s FTSE 100 ended the morning 0.6% lower, with continuing concern about the situation in the Middle East, profit taking in the utilities sector and weakness among precious metals miners all contributing.
Most European markets are closed for the May 1 International Workers’ Day holiday.