US stocks gained on Friday, building on the momentum from one of the strongest monthly rallies in years, as investor optimism around corporate earnings outweighed lingering concerns about geopolitical tensions and oil market volatility.
The Dow Jones Industrial Average rose about 180 points, or 0.36%, while the S&P 500 gained 0.54% and the Nasdaq Composite opened higher by 0.68%.
The advance comes after a record-setting session that saw the S&P 500 and Nasdaq Composite close at fresh highs, capping their best monthly performances since 2020.
The Dow also logged its strongest monthly gain since November 2024.
Earnings momentum and Apple boost sentiment
Investor confidence has been underpinned by a broadly strong first-quarter earnings season, particularly among large-cap technology companies.
Shares of Apple Inc. climbed more than 2.9% after the company reported better-than-expected quarterly results and issued a robust revenue outlook, supported by demand for its iPhone 17 lineup and MacBook Neo.
The positive sentiment extended across parts of the technology and software sectors.
Atlassian surged nearly 25% after raising its annual forecast, while peers including Salesforce, ServiceNow, Datadog, and Workday posted moderate gains.
Among individual movers, Reddit rose more than 11% following an upbeat revenue forecast, while Roblox dropped sharply by over 21% after cutting its annual bookings outlook.
Energy majors delivered mixed performances despite reporting earnings above expectations. Exxon Mobil edged slightly higher, while Chevron dipped modestly.
Oil prices ease as geopolitical signals shift
Oil markets showed signs of relief after recent volatility driven by tensions in the Middle East.
Prices declined on Friday following reports that Iran had sent a new proposal for negotiations with the United States via Pakistani mediators.
US West Texas Intermediate crude futures fell about 2% to trade above $102 per barrel, while international benchmark Brent crude slipped roughly 0.5% to just above $109.
The pullback comes after a sharp rally that had pushed oil prices to multi-year highs amid fears of supply disruptions linked to the conflict.
The easing in crude prices offered some support to equities, as investors weighed the potential for reduced geopolitical risk.
However, uncertainty remains elevated, particularly with shipping through the Strait of Hormuz having come to a standstill, raising concerns about longer-term supply constraints.
Outlook clouded by economic concerns and seasonal trends
Despite the strong market momentum, investors are increasingly cautious about the sustainability of the rally as markets head into May, a period historically associated with weaker returns.
Data from Fidelity shows that the S&P 500 has gained an average of about 2% between May and October since 1945, compared with roughly 7% during the November-to-April period.
At the same time, recent economic data has introduced a more nuanced outlook.
While the US gross domestic product expanded at a 2% annualised pace in the first quarter, underlying indicators suggest some softness.
Consumer spending growth slowed, and the personal savings rate declined, indicating households may be drawing down savings to maintain spending.
Concerns also persist around the scale of artificial intelligence-related spending by major technology companies and its implications for long-term profitability.
As markets enter a new month, investors will be balancing strong earnings momentum against macroeconomic risks and geopolitical developments, with the durability of the recent rally remaining a key question.
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