US Stock Market Edges Higher After Record April Rally

US Stock Futures Trade with Modest Gains Amid Ongoing Tensions in the Middle East

On Friday, 1 May, US stock futures were trading with modest gains, suggesting a pause in the rally that pushed Wall Street gauges to multiple record highs throughout April. The technology sector was a key driver of the gains, with the S&P 500 futures gaining 0.4% and the Nasdaq-100 futures remaining flat. In contrast, Dow Jones Industrial Average futures were down 0.3%.

The previous day's trading session had seen record-setting gains, with the S&P 500 closing above the 7,200 mark for the first time to hit a fresh peak of 7,219. The tech-heavy Nasdaq Composite also rose to another all-time high of 27,488. Alphabet led the way, rallying 10% after the owner of Google and YouTube reported quarterly profit that nearly doubled analysts' expectations. However, Meta Platforms tumbled 8.7% after raising its capital expenditure target.

Despite the ongoing conflict in the Middle East, which has now entered its third month, the US stock rally continued in April, with the S&P 500 finishing the month with a 10% surge, marking its biggest monthly percentage gain since November 2020. The Nasdaq Composite posted its strongest monthly advance since April 2020, while the Dow's monthly gain was its biggest since November 2024.

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The conflict in the Middle East has raised concerns about energy prices, with the US and Iran failing to agree on each other's terms. US President Donald Trump reaffirmed that the US would maintain its naval blockade of Iranian ports to intensify economic pressure. Iran's supreme leader, Mojtaba Khamenei, also dampened prospects for a deal, pledging not to relinquish the Islamic Republic's nuclear or missile capabilities and indicating that Tehran would retain control over the strait.

The US economy grew at a slower pace in the January-March quarter than economists had expected, while a key measure of inflation worsened in March as the war raised gasoline prices. This has reinforced expectations that the Federal Reserve could keep interest rates on hold well into next year.

Comparison of April 2024 Performance

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In other news, Apple rose 3.3% in pre-market trading on Friday after reporting third-quarter sales growth above estimates. Roblox tumbled 24% after the video game company reported daily active users for the first quarter that missed the average analyst estimate. SanDisk is down 6.2% after third-quarter results.

Crude oil prices continued to trade higher, with benchmark US crude holding above $105 a barrel and Brent crude, the international benchmark, edging back up to around $111 per barrel. Oil prices have now touched nearly double the levels seen at the start of the year, raising concerns about a global economic slowdown and higher inflation as fuel costs continue to surge. The International Energy Agency had earlier described the Iran conflict as one of the biggest energy supply shocks on record, warning that it could intensify inflationary pressures and weigh on the global growth outlook.