US Markets Rally on Earnings Strength Amid Geopolitical and Inflationary Pressures

Index Update
US equity markets recorded strong gains on Thursday, with the S&P 500 and Nasdaq posting their best monthly performance since 2020, while the Dow Jones Industrial Average rose more than 7%. The rally was primarily driven by solid corporate earnings, with notable contributions from Caterpillar and Eli Lilly. Alphabet surged following robust cloud segment performance, offsetting declines in Meta and Microsoft amid concerns over elevated AI-related spending. Intel also advanced on optimism surrounding its next-generation chip developments. On the macro front, the US economy expanded at an annualized rate of 2% in Q1, supported by historically low jobless claims, although elevated PCE inflation at 3.5% reflected persistent price pressures.

Market Movers
Among individual stocks, Huachen AI Parking Management Technology Holding Co., Ltd. emerged as the top gainer, surging 100.18%, followed by Akanda Corp., which advanced 88.38%. On the downside, Rising Dragon Acquisition Corp. declined 48.03%, while Lakewood-Amedex Biotherapeutics Inc. fell 25.91%, positioning them among the session’s largest laggards.

Commodities Update
Crude oil prices remained elevated, with WTI holding above USD 105 per barrel and Brent above USD 111, both on track for a second consecutive weekly gain. The upward momentum was driven by intensifying geopolitical tensions and tightening supply conditions. The likelihood of a US-Iran agreement weakened as the US maintained its naval blockade on Iranian ports, while Iran reaffirmed its stance on retaining nuclear and missile capabilities, alongside control over the Strait of Hormuz. Concerns over global supply shortages increased as remaining Persian Gulf shipments reached their destinations, prompting greater reliance on record US crude exports.

Gold prices held above USD 4,600 per ounce, while silver traded above USD 74, supported by a weaker US dollar following suspected currency intervention by Japan. Despite this support, both metals are set for a second weekly decline amid rising geopolitical tensions. Supply disruptions in energy markets have heightened inflation concerns, reinforcing expectations that central banks may maintain elevated interest rates. Additionally, central bank gold purchases during Q1 provided underlying support to bullion demand.

Macro Updates
The US dollar index traded near 98 after declining sharply, pressured by strength in the Japanese yen following suspected intervention by Japanese authorities, reportedly coordinated with US officials. Economic data indicated that the US economy grew at an annualized pace of 2% in Q1, with consumer spending rising 1.6% and jobless claims falling to multi-decade lows, reflecting underlying economic resilience. These developments follow the Federal Reserve’s decision to hold interest rates steady, while acknowledging increased uncertainty linked to geopolitical developments.

Bonds Commentary
The US 10-year Treasury yield remained below 4.45% after declining in the previous session, as moderating oil prices and fresh economic data prompted a reassessment of interest rate expectations. Although crude oil experienced a technical pullback, it remains on track for a second weekly gain amid Middle East tensions, which have previously driven yields higher due to inflation concerns. Meanwhile, softer consumer spending in Q1 was offset by strong investment in artificial intelligence, supporting overall economic growth.

Futures Update
US equity futures traded modestly higher on Friday, with the S&P 500 and Nasdaq hovering near record levels and the Dow edging upward. Market sentiment was supported by strong corporate earnings, even as geopolitical supply risks persisted. Apple rose more than 3% in premarket trading following strong results driven by iPhone sales and solid performance in China. Energy majors ExxonMobil and Chevron also gained after reporting better-than-expected earnings. Additionally, hyperscaler stocks moved higher as investors assessed the sustainability of AI-driven investment, which played a key role in supporting US GDP growth in the first quarter despite weaker consumer demand.

After witnessing notable volatility early in Thursday’s session, stocks rebounded strongly and maintained upward momentum throughout the day. The major indices recorded solid gains, with both the Nasdaq and the S&P 500 closing at fresh record highs. The S&P 500 rose 73.06 points, or 1.02%, to settle at 7,209.02. From a technical perspective, the S&P 500 (SPX) continues to exhibit a firm bullish trend, holding above its 20-EMA (~6,700) and 50-EMA (~6,731), which reflects strong short-term momentum and trend confirmation. The consistent pattern of higher highs and higher lows underscores sustained buying interest, while the recent move above the 7,200 level signals continuation strength following a decisive breakout from the 6,900–7,000 consolidation range. However, RSI is in overbought territory above 70, indicating that the rally could pause or experience minor pullbacks in the near term. As long as the index remains above the 7,050–7,000 support zone, the bullish structure stays intact, with scope for a move toward 7,280+, although a period of consolidation would be a healthy development before the next upward leg.