Summary
- The S&P 500 Index and Nasdaq Index hit fresh record highs on stronger-than-expected earnings from big tech companies including Alphabet and Amazon.
- Alphabet and Amazon rose on higher revenue from AI infrastructure, cloud and AWS, as well as increased capital investment plans, while Meta and Microsoft fell on concerns over capital spending and social-media users.
- AI infrastructure investment was interpreted as helping drive gains in U.S. GDP, stock prices and a recovery in investor sentiment, supporting the broader market.
Forecast Trend Report by Period
AI infrastructure-related revenue surges
Microsoft, Meta weaken on outlook concerns
The S&P 500 and Nasdaq Composite both set fresh record highs again on May 30, lifted by gains in big tech after Alphabet and Amazon posted earnings that beat market expectations.
All three major U.S. stock indexes ended higher in New York. The large-cap S&P 500 rose 1.02% from the previous session to 7,209.01, while the tech-heavy Nasdaq gained 0.89% to 24,892.31. The Dow Jones Industrial Average climbed 1.62% to 49,652.14. Bloomberg reported that the S&P 500 advanced 10% in April, its strongest monthly gain since November 2020. The Nasdaq also rose 15% that month, marking its biggest monthly increase since April 2020.
The rally was fueled in part by a recovery in investor sentiment as the AI investment boom boosted earnings expectations for related companies. The four hyperscalers that reported after the close a day earlier — Alphabet, Amazon, Meta Platforms and Microsoft — all posted profit above market forecasts. Their stocks moved in different directions on May 30, however, as investors assessed whether each company could sustain massive spending on AI infrastructure. Alphabet, Google's parent, surged 9.96% after posting strong cloud revenue growth and raising its capital spending outlook for this year. Amazon added 0.77% as sales rose rapidly, driven by Amazon Web Services, or AWS. Meta and Microsoft, by contrast, fell 8.55% and 3.93%, respectively. Meta raised concerns after its number of social-media users declined for the first time and its projected increase in capital expenditure fell short of market expectations.
Elsewhere, Eli Lilly jumped 9.76% on continued demand for its weight-loss treatment. Caterpillar also surged 9.88% after first-quarter profit rose on stronger demand for power-generation and construction equipment.
Stocks also drew support from a solid first reading of U.S. first-quarter gross domestic product. The Commerce Department said first-quarter GDP grew at an annualized 2.0% from the previous quarter. That was below the market estimate of 2.2%, but it was interpreted as a rebound from 0.5% in the fourth quarter of last year, with AI infrastructure investment helping drive growth.
Ahn Sang-mi, Hankyung.com reporter saramin@hankyung.com
Korea Economic Daily
hankyung@bloomingbit.ioThe Korea Economic Daily Global is a digital media where latest news on Korean companies, industries, and financial markets.
