Market Moves: Tech Earnings Boost, Economic Contraction, and Job Cuts Impacting Sentiment

Image Source : Krish Capital Pty Ltd

Index Update

In extended trading, Microsoft surged over 7% and Meta Platforms rose nearly 6% after both beat earnings expectations, driven by strong cloud and advertising revenue, respectively. Earlier, markets briefly dipped as data showed the U.S. economy shrank 0.3% in Q1 — its first contraction in three years — but rebounded as investors bought the dip. The Dow gained 0.35%, the S&P 500 rose 0.15%, and the Nasdaq slipped 0.09%. Optimism is growing that tariff pressures may have peaked. Investors now await key earnings from Apple and Amazon, along with more economic data on Thursday

Market Movers

On Wednesday, the top gainers were Rocky Brands, Inc (+27.38%), followed by Kingsoft Cloud Holdings Limited (+10.06%). On the contrary GeneDx Holdings Corp (-30.72%) and Super Micro Computer, Inc (-19.31%) declined the most the same day.

Commodities Update

Oil prices fell sharply, with both WTI and Brent crude dropping over 2% to their lowest levels in three weeks, marking a fourth straight day of losses. The decline was driven by concerns over a potential supply increase from OPEC+, particularly Saudi Arabia's reluctance to implement further output cuts, and weakening global demand amid trade tensions. A contraction in the U.S. economy and a larger-than-expected draw in U.S. crude inventories failed to support prices.

Gold prices also declined for a third consecutive session, slipping below $3,230 per ounce and hitting a two-week low. The drop was attributed to easing trade tensions and a stronger U.S. dollar, which reduced demand for the safe-haven asset. Optimism around potential U.S. trade deals and a partial rollback of auto tariffs further weighed on gold, as investors looked ahead to upcoming labor data for clues on future Fed policy.

Macro Update

U.S. employers announced 105,441 job cuts in April, down 62% from March but still 63% higher than April 2024, marking the highest April total since 2020. Year-to-date layoffs in 2025 have reached 602,493—the most since 2020—driven mainly by government DOGE-related cuts, along with reductions in tech and retail. Challenger, Gray & Christmas noted that economic uncertainty and new technologies are prompting companies to slow hiring and scale back amid evolving trade, supply chain, and consumer spending conditions

Futures Update

U.S. stock futures climbed sharply following strong earnings reports from major tech companies, lifting market sentiment. The Dow Jones, S&P 500, and Nasdaq 100 futures all posted notable gains. This came after the broader markets had rebounded from earlier losses, despite data showing a contraction in U.S. GDP, marking the first quarter of negative growth in years. While recent volatility, partly driven by tariff-related announcements, led to monthly losses for the Dow and S&P 500, the Nasdaq Composite managed to end higher.

After experiencing a sharp decline early in the session, stocks exhibited a notable rebound throughout trading on Wednesday. All major indices recovered well from their worst levels of the day, ultimately closing mixed. The S&P 500 gained 8.25 points, or 0.15%, finishing at 5,569.97. From a technical perspective, the index broke its downward sloping trendline, indicating the potential for further gains in the near term. Additionally, the 14-period Relative Strength Index (RSI) remains above the midpoint, suggesting that bullish momentum may develop soon. The key support level is established at 5,367, while resistance is identified at 5,712.