Wall Street rallies as Microsoft and Meta blow past estimates

Wall Street surged Wednesday night after Microsoft and Meta Platforms crushed quarterly earnings and flipped the market’s momentum. The rebound came fast and hard after futures climbed across the board.

Traders, rattled earlier by weak GDP numbers and policy confusion from the White House, turned their attention to Big Tech. They pushed Dow futures up 138 points, or 0.3%, while S&P 500 futures rose 0.8%, and Nasdaq 100 futures exploded 1.3%. Every single one of those moves was pinned to earnings.

Meta, which posted its Q1 results after hours, gained over 5% in extended trading. Revenue for the quarter came in above estimates. Microsoft went even higher, gaining nearly 7% after beating both revenue and profit estimates for the fiscal third quarter.

What caught investor attention was Azure. Its cloud unit delivered strong growth again, and the company gave forward guidance that left buyers satisfied.

Shares of Tesla, meanwhile, did the exact opposite. They fell more than 3% in after-hours trading on Robinhood following reports that the board is now hunting for someone to take over from Elon Musk as CEO. No replacement has been named, but the search alone was enough to send the stock sliding.

Traders ignore shrinking GDP, buy into market reversal

Earlier in the day, the market wasn’t this confident. Wall Street had started the session off messy. By mid-morning, the S&P 500 had dropped more than 2%, and the Dow fell over 780 points.

Then everything reversed. By the closing bell, both indexes finished in the green, and it wasn’t based on solid fundamentals either. It was panic first, then buy-the-dip.

Part of that panic came from fresh data out of the Commerce Department. The latest read showed gross domestic product shrinking at a rate of 0.3% on an annualized basis. That’s the first quarter of negative growth since early 2022.

Analysts surveyed by Dow Jones were looking for a 0.4% increase. They didn’t get it. Instead, the economy slid backward. But traders ignored it, choosing instead to chase beaten-down names into the close.

That volatility marked the final trading day of April, which has been brutal. Stocks got rocked after President Donald Trump dropped a “reciprocal” tariff announcement on April 2. He later walked back the harshest ones, but the damage was already done.

At one point, the S&P 500 had dropped more than 20% from its February record, enough to qualify as a bear market. The index closed the month still down 9% from its high.

The Dow and S&P 500 didn’t recover enough to save the month. The Dow lost 3.2%, while the S&P dropped 0.8%. Only the Nasdaq Composite escaped with gains, finishing April up 0.9%.

Fed expectations shift while trading volume lags

On the Federal Reserve front, traders now expect the central bank to slash interest rates by a full percentage point before the end of the year. However, recent remarks from Chair Jerome Powell and other Fed officials suggest that they will be very slow to act. There’s no guarantee those cuts will happen anytime soon.

Wednesday also marked the 100th day of Trump’s return to the White House. Since he took office, his trade policies, tariff threats, and nonstop political stunts have canceled out any early hope for deregulation or tax breaks. Whatever boost markets felt after his November win has completely evaporated. Volatility is what’s left.

The numbers confirmed how rough the session was, even if it ended in green. On the NYSE, declining stocks beat advancers by a 1.19-to-1 ratio. On the Nasdaq, it was worse – 1.28-to-1. The S&P 500 notched 10 new 52-week highs and 3 new lows. But the Nasdaq Composite had 39 new highs and a staggering 85 new lows.

And volume? Down. Total trading across US exchanges came in at 16.97 billion shares, way below the 20-day average of 19.57 billion. That’s not exactly a sign of confidence. It just proves how spooked everyone still is, even with a rally on the board.