The Pulse: Global economic and market news for Thursday, May 1, 2025

Overview

On May 1, 2025, global markets and economies reflected heightened volatility and uncertainty, primarily driven by the ongoing impact of U.S. tariff policies under President Donald Trump. While major U.S. stock indices rallied on strong Big Tech earnings, economic data, and international forecasts pointed to a more fragile and cautious global outlook.

Key Market Movements

• The Nasdaq Composite surged 1.52% to close at 17,710.74, recovering losses incurred since early April. The S&P 500 rose 0.63% to 5,604.14, and the Dow Jones Industrial Average gained 0.21% to 40,752.96. These gains were primarily fueled by robust earnings from Microsoft and Meta, which not only reassured investors about the resilience of the artificial intelligence (AI) sector but also its potential to withstand broader economic headwinds.

•               Microsoft shares advanced by over 8%, and Meta and Amazon both gained more than 4%, following strong quarterly results. Amazon’s ad business grew 19% year-over-year in Q1, beating analyst expectations23.

•               Conversely, Qualcomm shares fell more than 8% after issuing a disappointing revenue forecast, highlighting ongoing sector-specific risks2.

Economic Data and Outlook

•               The U.S. economy contracted at an annual rate of 0.3% in the first quarter of 2025, marking the first decline since 2022. The contraction was attributed primarily to a surge in imports as businesses stockpiled goods ahead of new tariffs, which temporarily inflated economic activity but is expected to weigh on future growth 6810.

•               Manufacturing activity continued to contract, with the ISM manufacturing PMI registering 48.7 (below the 50 mark that separates expansion from contraction), though this was slightly better than economists had forecasted2.

•               Weekly unemployment claims rose to a two-month high at the end of April, with continuing claims reaching their highest level since November 2021, signaling growing fragility in the U.S. labor market2.

•               Consumer spending rose 1.8% last quarter, but much of this was attributed to pre-tariff purchases, raising concerns about a potential slowdown in the coming months810.

Global Developments

•               S&P Global downgraded its global economic outlook, projecting growth to be 0.3 percentage points lower in 2025 and 2026 than previous forecasts. The evolving trade environment, which is expected to affect all regions, is a key factor in this projection, highlighting the interconnectedness of the global economy.

•               The Bank of Japan halved its 2025 GDP growth forecast to 0.5%, citing the adverse effects of global trade tensions and tariffs on foreign and domestic economic activity12.

•               Thomson Reuters reaffirmed its 2025 financial guidance despite the global economic turmoil. The company's recurring revenue base and long-term contracts provide a stable foundation, even as many companies are revising their forecasts, offering a sense of security to investors.

Corporate Highlights

•               Microsoft reiterated its commitment to an $80 billion investment in AI data centers, primarily in the U.S., while Meta adjusted its 2025 capital expenditure outlook to $64–$72 billion2.

•               McDonald’s reported a first-quarter earnings miss and a decline in U.S. sales, with its CEO citing consumer uncertainty linked to tariff impacts as a key factor.

Disclosure

This article is intended for informational purposes only and does not constitute investment advice or a solicitation to buy or sell any securities. All information is based on publicly available sources as of May 1, 2025. The author does not hold any positions in the securities mentioned herein.

Sources

• S&P Lowers Global Economic Outlook: https://www.dailyfly.com/2025/05/01/sp-lowers-global-economic-outlook-amid-trumps-tariff-policies/1
• Nasdaq Surges on Big Tech Earnings: https://finance.yahoo.com/news/live/stock-market-today-nasdaq-surges-as-ai-trade-reignites-amid-big-tech-earnings-dow-sp-500-rise-for-8th-day-200051889.html2
• US Stock Market Highlights: https://www.cnbctv18.com/market/us-stock-market-live-updates-us-market-dow-snp-nasdaq-microsoft-meta-apple-gold-ukraine-trump-dollar-liveblog-19597316.htm3
• US GDP Contraction and Trade: https://www.bloomberg.com/news/newsletters/2025-05-01/global-economy-latest-us-gdp-contraction-and-trade6
• Impact of Tariffs on US Economy: https://www.cnn.com/2025/05/01/economy/us-gdp-economy-weaker-than-it-appears8
• Bank of Japan Cuts Growth Forecast: https://www.cnn.com/2025/05/01/economy/bank-of-japan-gdp-forecast12
• Thomson Reuters Maintains Guidance: https://www.reuters.com/business/media-telecom/thomson-reuters-reports-first-quarter-revenue-slightly-below-wall-street-2025-05-01/13

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