Wall Street rallied Wednesday night after Microsoft and Meta posted better-than-expected earnings, reversing earlier market weakness. 

The strong results shifted investor sentiment sharply, driving gains across key indexes.

Big Tech powers market comeback

Microsoft and Meta Platforms exceeded Wall Street expectations with their latest quarterly results, lifting investor confidence after a turbulent start to the day. Meta shares rose more than 5% in after-hours trading as the company reported revenue that beat analyst estimates. Microsoft gained nearly 7% after its fiscal third-quarter results topped both profit and revenue forecasts.

Microsoft’s Azure cloud platform remained a key growth driver. Strong performance in the cloud division and positive forward guidance reassured investors and supported the broader tech rally. These results helped push futures higher across the board, with Dow futures gaining 138 points, S&P 500 futures rising 0.8%, and Nasdaq 100 futures jumping 1.3%.

Tesla, however, slipped over 3% after reports emerged that the company’s board was looking for a potential replacement for Elon Musk as CEO. The lack of a named successor contributed to the after-hours decline.

Weak GDP and volatile session shake confidence

Earlier in the session, Wall Street faced sharp losses due to weaker-than-expected GDP data and ongoing uncertainty around government policy. The Commerce Department reported a 0.3% contraction in gross domestic product on an annualized basis. Analysts had forecast a 0.4% increase, marking the first negative quarter since 2022.

Markets initially reacted negatively. By mid-morning, the Dow had dropped more than 780 points and the S&P 500 fell over 2%. However, a late-session turnaround driven by earnings optimism brought both indexes back into positive territory. Despite the gains, the rebound appeared driven more by short-term sentiment than solid economic fundamentals.

Trump policies, Fed outlook weigh on sentiment

April ended with major indexes still reflecting the month’s broader volatility. The Dow fell 3.2%, the S&P 500 dropped 0.8%, while the Nasdaq managed a 0.9% gain. Early in the month, markets were rattled by new tariffs announced by President Donald Trump, which triggered heavy losses.

Investment market participants have adopted different predictions about Federal Reserve policy choices. Market traders currently predict the Federal Reserve to execute a complete percentage point reduction of interest rates by the end of 2019. According to Fed Chair Jerome Powell the central bank does not intend to rush its decisions. Trading volume indicators demonstrated low activity because investors maintained a stance of caution since the exchange activity dropped beneath the twenty-day average.

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