S&P 500, NASDAQ on track for best performance since 2020

The S&P 500 and Nasdaq Composite are on track to end April with their largest gains since 2020, signaling that robust corporate earnings have helped soothe investor concerns despite a historic shock to oil supplies.

This rally reflects investors' heavy reliance on earnings strength to navigate geopolitical turmoil, though it increases the risk of a swift reversal if companies begin signaling that war-related costs are weighing on growth.

Angelo Kourkafas, senior investment strategist at Edward Jones, noted: “There is a significant tug-of-war between factors, but the earnings side is winning out so far.” He added: “The market is trying to look past short-term uncertainty, but the longer it persists, the more acute the pressures become.”

By 10:14 a.m. ET on Thursday, the Dow Jones Industrial Average rose 429.39 points, or 0.88%, to 49,233.73. Meanwhile, the S&P 500 remained flat at 7,138.78, and the Nasdaq Composite fell 77.65 points, or 0.31%, to 24,595.59.

Despite the mixed daily performance, the S&P 500 is heading toward its best monthly gain since November 2020, while the Nasdaq is on pace for its best month since April 2020. The Dow is also nearing its strongest monthly performance since November 2024.

Data released Thursday showed that U.S. economic growth accelerated in the first quarter, driven by a rebound in government spending. However, this increase is likely to be temporary as rising fuel prices resulting from the war with Iran pressure household budgets.

Results from Big Tech were broadly strong. Alphabet shares rose 6.1% to a record high following a solid performance in its cloud computing unit. Conversely, Meta Platforms and Microsoft fell 8.4% and 4.8%, respectively, following capital expenditure announcements, while Amazon dropped 2.1% despite exceeding cloud sales expectations.

Seven of the 11 major S&P 500 sectors recorded gains, led by a 1.6% rise in utilities.

Investors also assessed remarks from Fed Chair Jerome Powell on Wednesday. While the central bank held interest rates steady, three officials indicated that inflation remains too high to signal a shift toward rate cuts.

Brent crude futures hit a nearly four-year high amid fears of long-term oil market disruptions. This followed an Axios report stating that President Donald Trump would receive a briefing from the U.S. Central Command chief regarding new plans for potential military action against Iran.

David Morrison, senior market analyst at Trade Nation, commented: “There also seems to be a growing urgency from the Trump administration to get things settled.” While oil prices have retreated from their peaks, they remain elevated at around 110 dollars per barrel. The Axios report weakened the wave of optimism that had prevailed for weeks regarding a diplomatic path to resolve the U.S.-Iran conflict.

In individual stocks, Eli Lilly shares jumped 7% after the pharmaceutical company raised its annual profit forecast, driven by sustained demand for weight-loss drugs. Caterpillar also climbed 8.4% to a record high following better-than-expected first-quarter earnings.

Advancing issues outnumbered decliners by a 2.14-to-1 ratio on the NYSE and a 1.6-to-1 ratio on the Nasdaq. The S&P 500 posted 20 new 52-week highs and 13 new lows, while the Nasdaq Composite recorded 54 new highs and 71 new lows.