(Bloomberg) — Stocks rose on signals the main engine of the world’s largest economy remains solid, which bodes well for the strength of Corporate America.
About 410 shares in the S&P 500 advanced after upbeat outlooks from industry heavyweights like Tesla Inc., Meta Platforms Inc. and International Business Machines Corp. Traders are now eagerly awaiting Apple Inc.’s results due after the closing bell. While the majority of companies have so far exceeded Wall Street’s expectations, disappointing forecasts have been met with selloffs, with Microsoft Corp. and United Parcel Service Inc. being the latest examples.
The US economy expanded at a strong pace at the end of 2024, more than offsetting drags from a strike at Boeing Co. and much leaner inventory investment. Consumer spending, which comprises the largest share of economic activity, advanced at a 4.2% pace — the first time since late 2021 that outlays have exceeded 3% in consecutive quarters.
To Neil Birrell at Premier Miton Investors, while the data is all a bit historic now, the economy is “doing just fine.”
“Overall, the economy is on firm footing heading into 2025, which should support risk assets given the strong linkage between economic growth and corporate profits,” said Josh Jamner at ClearBridge Investments.
The S&P 500 rose 0.2%. The Nasdaq 100 was little changed. The Dow Jones Industrial Average added 0.3%. A gauge of the “Magnificent Seven” megacaps fell 0.3%. The Russell 2000 of small firms gained 1.1%.
The yield on 10-year Treasuries declined two basis points to 4.51%. The Bloomberg Dollar Spot Index fell 0.3%. Gold hit a all-time high. Euro-zone bonds remained higher after the European Central Bank lowered borrowing costs.
Corporate Highlights:
- The collision between an American Airlines Group Inc. regional jet and a military helicopter near Ronald Reagan airport in Washington left no survivors on board the two aircraft, authorities said, making it one of the most deadly US air disasters in decades.
- Southwest Airlines Co. warned that costs will climb faster than expected as it grapples with heavy labor expenses, undercutting gains from strong demand for leisure travel.
- United Parcel Service Inc. projected annual revenue well below expectations, telling investors that a long-awaited rebound in demand for its parcel services won’t arrive this year.
- Tesla Inc. plans to launch a long-promised robotaxi business and get back to growing vehicle sales after a year of decline in both deliveries and earnings.
- Microsoft Corp. said its cloud-computing business will continue to grow slowly in the current quarter as the company struggles to build enough data centers to handle demand for its artificial intelligence products.
- Meta Platforms Inc. Chief Executive Officer Mark Zuckerberg exuded confidence in his company’s artificial intelligence strategy, saying 2025 will be a “really big year” in which its AI assistant will become the most widely used in the industry.
- International Business Machines Corp. projected strong revenue growth in the new fiscal year and a jump in AI-related bookings.
- Caterpillar Inc. warned that revenues will be “slightly lower” in 2025 as demand concerns weigh on the outlook of the heavy equipment maker.
- Mastercard Inc. reported earnings that beat estimates as the firm diversifies beyond its traditional payment network into anti-fraud services, data analysis and global money movement.
- Rogers Communications Inc. beat analysts’ fourth-quarter estimates as wireless service revenue gained and subscribers bought more expensive devices.
- Cigna Group reported its fourth quarter was hit by surprisingly high costs from plans employers use to cover catastrophic medical claims.
Key events this week:
- US personal income & spending, PCE inflation, employment cost index, Friday
Some of the main moves in markets:
Stocks
- The S&P 500 rose 0.2% as of 10:35 a.m. New York time
- The Nasdaq 100 was little changed
- The Dow Jones Industrial Average rose 0.2%
- The Stoxx Europe 600 rose 0.8%
- The MSCI World Index rose 0.4%
- Bloomberg Magnificent 7 Total Return Index fell 0.3%
- The Russell 2000 Index rose 1.1%
Currencies
- The Bloomberg Dollar Spot Index fell 0.3%
- The euro rose 0.1% to $1.0433
- The British pound rose 0.1% to $1.2467
- The Japanese yen rose 0.8% to 153.91 per dollar
Cryptocurrencies
- Bitcoin rose 2% to $105,781.9
- Ether rose 3.9% to $3,264.68
Bonds
- The yield on 10-year Treasuries declined two basis points to 4.51%
- Germany’s 10-year yield declined eight basis points to 2.50%
- Britain’s 10-year yield declined eight basis points to 4.54%
Commodities
- West Texas Intermediate crude rose 1.2% to $73.48 a barrel
- Spot gold rose 1.1% to $2,789.42 an ounce
This story was produced with the assistance of Bloomberg Automation.
–With assistance from Margaryta Kirakosian, Allegra Catelli and Divya Patil.
©2025 Bloomberg L.P.
