In midday trading, the S&P 500 (SNPINDEX:^GSPC) rose 0.46% to 7,168.62, the Nasdaq Composite (NASDAQINDEX:^IXIC) added 0.21% to 24,724.49, and the Dow Jones Industrial Average (DJINDICES:^DJI) climbed 1.49% to 49,588.34, with the Dow outpacing peers on strength in industrials.
Market movers
Caterpillar (NYSE:CAT) rallied after its earnings reaction, helping propel the Dow and offsetting weakness in mega-cap tech. In contrast, Meta Platforms (NASDAQ:META) slumped nearly 9% following its results, while Microsoft (NASDAQ:MSFT) slid about 5% as investors digested a sharply higher AI capex outlook.
What this means for investors
After the Federal Reserve decision to hold interest rates steady yesterday, the 10-year yield hovered near 4.40%. Geopolitical tensions are keeping oil prices volatile, but investors are focusing on a flurry of large-cap earnings.
Industrial stalwart Caterpillar is leading the Dow Jones index higher with a double-digit gain after beating expectations as Q1 revenue grew 22%. The company also increased its full-year revenue forecast as its power equipment business benefits from the surge in AI infrastructure.
Technology names lagged after mixed results from four tech giants last night. A common theme from Big Tech was continued AI-driven demand and higher capital spending plans.
The increase in capex comes as hyperscalers continue to accelerate AI infrastructure development, but also due to rising hardware costs. The latter is raising concerns that returns on these investments may be harder to achieve.
Investors will focus next on results from Apple (NASDAQ:AAPL) after the market close today.
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