Stocks rallied in the final session of the month as strong earnings growth from some of the market's largest components propelled the S&P 500 (+1.0%) and Nasdaq Composite (+0.9%) to fresh record highs, while the DJIA (+1.6%) captured an even wider gain for the day. Following the latest batch of earnings, the Q1 blended growth estimate jumped from 15% yesterday to 26% today, according to FactSet, helping set the stage for a broad-based advance.

Ten S&P 500 sectors finished higher, led by a substantial gain in the communication services sector (+4.0%) following Alphabet's (GOOG 381.94, +34.63, +9.97%) Q1 earnings, which exceeded expectations across all major segments, supported by accelerating AI-driven demand and improved operating leverage. Alphabet's gain was more than enough to offset weakness in Meta Platforms (META 611.91, -57.21, -8.55%), which also topped estimates, although investors reacted negatively to in-line Q2 guidance and a sharp increase in the company's FY26 capital expenditure plans.

Elsewhere, Caterpillar (CAT 890.75, +80.70, +9.96%) was one of several blue-chip stocks to post impressive gains after a blowout earnings report of its own, contributing to the outperformance of both the DJIA and the industrials sector (+2.8%).

Eli Lilly (LLY 934.34, +83.13, +9.77%), the health care sector's (+2.2%) largest component, notched a similar gain, as it also posted a decisive earnings beat that was boosted by a 125% increase in Mounjaro sales.

While the consumer discretionary sector (+1.2%) logged a more modest advance, its sharp move above its flat line in the early afternoon helped the major averages finish near session highs. Amazon (AMZN 265.06, +2.02, +0.77%) faced some choppy action as investors weighed a strong EPS beat and upside revenue growth against elevated capital spending and a recent run-up to earnings, but finished with a nice gain.

Meanwhile, the top-weighted information technology sector (-0.6%) was the only S&P 500 sector to miss out on today's advance.

Similar to Meta Platforms, Microsoft (MSFT 407.78, -16.68, -3.93%) topped earnings expectations, but moved sharply lower as investors reacted to elevated capital expenditure plans.

NVIDIA's (NVDA 199.53, -9.72, -4.64%) loss also weighed heavily on the sector, with some analysts attributing the retreat to rising competition from other hyperscalers such as Alphabet and Amazon. Still, the PHLX Semiconductor Index (+2.3%) moved higher throughout the session, led by an impressive post-earnings gain from Qualcomm (QCOM 179.58, +23.58, +15.12%) and a rebound in Teradyne (TER 343.47, +37.14, +12.12%) following yesterday's slide.

Western Digital (WDC 434.52, +21.76, +5.27%) and Apple (AAPL 271.35, +1.13, +0.42%) both traded higher ahead of their earnings after the close. 

Outside of the S&P 500, the Russell 2000 (+2.2%) and S&P Mid Cap 400 (+1.7%) outperformed.

Overall, today's session capped a historic month for equities that saw the market reclaim losses attributed to the U.S.-Iran conflict and make a renewed push into record territory. To that end, the U.S. and Iran seemingly remain at an impasse on negotiations, but a modest retreat in oil prices today added to the constructive backdrop.

The S&P 500 (+10.4% month-to-date), Nasdaq Composite (+15.3% month-to-date), and DJIA (+7.1% month-to-date) each logged strong monthly advances, highlighting a powerful rebound that carried the market back to record highs alongside a notable acceleration in earnings growth.

U.S. Treasuries ended April on a higher note, reclaiming a portion of their losses from this month. The 2-year note yield settled down five basis points to 3.88% (+8 basis points in April), and the 10-year note yield settled down three basis points to 4.39% (+8 basis points in April).

• Russell 2000: +12.8% YTD
• S&P Mid Cap 400: +10.1% YTD
• Nasdaq Composite: +7.1% YTD
• S&P 500: +5.3% YTD
• DJIA: +3.3% YTD

Reviewing today's data:

• Q1 GDP-Adv. 2.0% (Briefing.com consensus 2.1%); Prior 0.5%, Q1 Chain Deflator-Adv. 3.6% (Briefing.com consensus 3.3%); Prior 3.7%
  • The key takeaway from the report is that the growth was driven by gross private domestic investment, which contributed 1.48 percentage points, and personal consumption expenditures, which contributed 1.08 percentage points to the GDP increase. Not to be overlooked, though, is that the PCE price index was up 4.5%, while the core PCE price index was up 4.3%.
• March Personal Income 0.6% (Briefing.com consensus 0.4%); Prior was revised to 0.0% from -0.1%, March Personal Spending 0.9% (Briefing.com consensus 0.4%); Prior was revised to 0.6% from 0.5%, March PCE Prices 0.7% (Briefing.com consensus 0.6%); Prior 0.4%, March PCE Prices - Core 0.3% (Briefing.com consensus 0.3%); Prior 0.4%
  • The key takeaway from the report is that spending has remained solid in the face of stubbornly high inflation-a dynamic that is going to leave the Fed disinclined to cut rates.
• Q1 Employment Cost Index 0.9% (Briefing.com consensus 0.8%); Prior 0.7%
  • The key takeaway from the report is that the increase in wages and salaries for civilian workers over the last 12 months (3.4%) is barely running ahead of inflation.
• Weekly Initial Claims 189K (Briefing.com consensus 217K); Prior was revised to 215K from 214K, Weekly Continuing Claims 1.785 mln; Prior was revised to 1.808 mln from 1.821 mln
  • The key takeaway from the report is the strikingly low number of initial claims. That just isn't consistent with a labor market that is falling apart-far (very far) from it.
• April Chicago PMI 49.2 (Briefing.com consensus 52.4); Prior 52.8