Stocks rose on Thursday after strong quarterly results from two Big Tech players eased concerns that advances in artificial intelligence would slow amid economic turmoil.

The Dow Jones Industrial Average rose 83 points, or 0.2%. The S&P 500 gained 0.6%, near its level before President Donald Trump's "Liberation Day" tariff announcement in early April. The Nasdaq Composite rose more than 1%.

Investor concerns that Trump's tariffs and a U.S. economic downturn would threaten AI trading eased after Meta Platforms posted stronger-than-expected first-quarter revenue, with Meta Chief Executive Mark Zuckerberg saying on a Wednesday earnings call that the business "performed very well" and that it is "well positioned to navigate macroeconomic uncertainty."

Microsoft also reported net income and gross profit in the fiscal third quarter as well as strong results from its Azure cloud business. Additionally, the company offered upbeat guidance, further allaying some concerns about the tech company's future performance. Company executives said during Wednesday's earnings call that they expect capital spending to pick up from here as they continue to expand data center capacity, noting that "cloud and AI are critical inputs for every business to expand output, reduce costs and accelerate growth." The results sent the stock up 7%, while Meta shares rose 4%. Other names like Nvidia, the AI ​​chip darling, also moved up 2%, and information technology outpaced the rest of the S&P 500, rising 2%. "Few stocks are completely immune to Trump's tariffs [and] trade wars, but AI is far less affected than investors currently believe," said Jed Ellerbroek, portfolio manager at Argent Capital Management. "We're at the beginning of a very steep growth curve right now, and that's true for AI infrastructure."

Somewhat dampening Thursday's optimism was a jump in weekly jobless claims to 241,000, higher than the Dow Jones estimate of 225,000. The surge further exacerbated concerns about the economy after a weak first-quarter gross domestic product report earlier in the week and raised bets for a reading on April's nonfarm payrolls on Friday.

In the previous session on Wednesday, the S&P 500 and the 30-stock Dow posted gains in choppy trading, recovering from earlier losses. At the day's lows, the broad market index was down more than 2%, while the blue-chip Dow lost more than 780 points.

Traders were initially shaken by weak economic data from the Commerce Department, which showed GDP fell at an annualized pace of 0.3%. That marked the first quarter of negative growth since the first quarter of 2022. Economists surveyed by Dow Jones had forecast a 0.4% gain. Investors shrugged off the dismal results and began buying back into the market late in the session, resulting in a rebound into positive territory for the Dow and S&P 500.

Wednesday marked the last trading day of April, when stocks first slumped following President Donald Trump's April 2 announcement of "reciprocal" tariffs and subsequent suspension of the levies. At one point during the month, the S&P 500 briefly slipped into a bear market — down more than 20% from its record high in February — before clawing back some of its losses. The broad market index ended Wednesday down about 9% from its record close.

However, the recovery couldn't save the S&P 500 and Dow from April's losses, as they fell about 0.8% and 3.2%, respectively. The Nasdaq Composite, however, gained 0.9% in the period. (Newsmaker23)

Source: CNBC