Tech takes centerstage, but trade tensions loom large

Major U.S. tech names reported their first-quarter results Thursday, offering markets something more to chew on besides all the tariff-related news. 

U.S. stock indexes rallied: the Dow regained the 40,000 level, and the S&P500 and Nasdaq posted gains of over 2%.

While tech appears to be at the forefront of investors’ mind for now, tariffs and trade tensions still lurk in the shadows, with Intel CFO David Zinsner warning that tariffs and retaliation from other countries has increased the likelihood of a recession.

Also, the optimism that both the U.S. and China were going to de-escalate the trade war has been watered down by China saying there were no ongoing trade talks with the U.S. 

U.S. President Donald Trump reportedly refuted China’s claims, saying that trade talks were underway, but declined to reveal any details on the nature of the talks, adding to the uncertainty around trade.

Oh well, seems like it’s a case of he said, she said — only at the highest levels of diplomacy between the world’s largest economies. That’s got to keep markets on tenterhooks.

— Lim Hui Jie

Alphabet shares climb after better than expected results
Alphabet, the parent company of Google and YouTube, reported stronger-than-expected first-quarter growth Thursday after the bell. Alphabet’s search and advertising units are still showing strong growth despite AI competition heating up, according to its first-quarter earnings report. The company’s overall revenue grew 12% year over year, higher than the 10% Wall Street expected. Shares rose more than 5% in after-hours trading. 

Intel also posts results beat, but warns of tariff impact
Intel reported first-quarter results Thursday that beat analysts’ estimates, but also issued disappointing guidance. Second-quarter revenue will come in below estimates due to elevated uncertainty driven by the macro environment, the company warned. Separately, Intel CFO David Zinsner said President Donald Trump’s tariffs and retaliation from other countries had increased the likelihood of a recession.

Retail shortages from trade war will hit U.S. consumers in stages
Warnings of empty store shelves have been making headlines as multiple press reports indicate that CEOs of America’s top retail stores told President Trump that a prolonged trade war would lead to shortages. Already, a decline in manufacturing orders from China, and a drop in Chinese freight vessel bookings and sailings to the U.S. are edging the national supply chain closer to a tipping point. 

Meta lays off VR employees in Reality Labs division
Meta has laid off employees in its Reality Labs division that is tasked with developing virtual reality, augmented reality and related wearable devices. The cuts affected an unspecified number of employees working in the division’s Oculus Studios unit, which develops VR and AR games and content for Meta’s Quest VR headsets, a company spokesperson told CNBC. Employees working on the Supernatural VR workout app were impacted, the spokesperson said.

Tech gains power markets 
Stocks popped Thursday thanks to strong gains in megacap tech names. The S&P 500 ended up 2.03%, while the tech-heavy Nasdaq Composite added 2.74%. The Dow Jones Industrial Average lagged the other two indexes but still added 1.23%, and retook the 40,000 mark for the first time since April 15. Over in Europe, the pan-European Stoxx 600 index provisionally ended up 0.38%, with most sectors in the green.

[PRO] The Mag 7 isn’t so mighty anymore
The market’s leading tech stocks don’t hold the same sway they once did, and that may change the ingredients needed for a Wall Street rally. The Roundhill Magnificent 7 ETF (MAGS) — which holds shares of the Mag 7 in roughly equal measure — is now down 17% for the year. That’s more than double the drop of almost 7% in the S&P 500.

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