The S&P 500 closed sharply higher for the week Friday as Alphabet’s better-than-expected quarterly results stoked fresh optimism on artificial intelligence, extending the recent rally in tech.
At 4:00 p.m. ET (20:00 GMT), the S&P 500 rose 0.7% to end the week more than 4% higher. The NASDAQ Composite gained 1.3%, the Dow Jones Industrial Average rose 0.1%.
Alphabet rises on strong earnings Alphabet (NASDAQ:GOOGL) shares climbed more than 1% after the tech giant reported much stronger than expected earnings for the first quarter and announced a $70 billion buyback.
The company also reaffirmed its ambitious AI development plans, offering more confidence that AI-driven demand for chips and data centers will persist.
"Against the backdrop of negative sentiment and data checks, regulation woes, competition concerns and macro related fears, Alphabet reported a blow to bears, with virtually no hair on the print and strong growth across all major segments," Deutsche Bank said in a recent note.
Gains in the tech giant, however, were stifled somewhat as legal headwinds weigh after court documents showed Friday that a Federal judge had set a May 2 data to evaluate potential remedies in the antitrust case filed by the Department of Justice alleging that the tech giant holds illegal monopolies in ad-tech.
The better-than-expected results renewed optimism in AI, pushing broader tech sharply higher. NVIDIA Corporation (NASDAQ:NVDA), and Meta Platforms Inc (NASDAQ:META) were also in rally mode.
Elsewhere, Intel (NASDAQ:INTC) stock fell more than 6% as weak guidance offset consensus-beating earnings, with the struggling chipmaker also flagging heightened concerns over macro headwinds from a trade war.
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T-Mobile US (NASDAQ:TMUS) stock dropped 11% after the telecommunications company added fewer wireless subscribers than expected in the first quarter, as rivals dialed up promotions in a saturating U.S. telecom market.
Colgate-Palmolive (NYSE:CL) stock was 1% higher after the consumer goods company slashed its full-year guidance for organic sales, becoming the latest company to cite possible headwinds from aggressive U.S. tariffs, although it still delivered better-than-anticipated first-quarter earnings.
The barrage of company earnings is set to continue in the coming weeks, including from tech giants Microsoft (NASDAQ:MSFT) and Apple (NASDAQ:AAPL), although the focus is likely to be more on guidance for the current year, especially in the face of heightened economic uncertainty.
Trump hints at high tariffs remaining However, U.S. equities were hit Friday following the publication of an interview with U.S. President Donald Trump in the Time magazine, in which the president said he would consider it a “total victory” if the U.S. has high tariffs of 20% to 50% on foreign countries a year from now.
Expectations that negotiations would bring down tariffs in the near future, particularly between the U.S. and China, had prompted something of a recovery in risk sentiment in the latter half of the week.
Sentiment had received a boost earlier in the session following a report that China is considering giving an exemption to some U.S. products to its steep retaliatory tariffs and is asking businesses to identify goods that could be eligible.
Citing a source close to the matter, Reuters said a taskforce from China’s Ministry of Commerce is putting together a list of items that might be exempted and asking companies to submit their own requests.
Investors had been encouraged by indications that U.S. President Donald Trump’s administration may be softening its stance towards Beijing. Trump has made China a central target of his aggressive tariff agenda, raising levies on the world’s second-largest economy to at least 145%.
On the economic calendar, the final reading of the University of Michigan’s consumer sentiment survey for April dropped less than expected to a reading of 52.2.
