Finance

Alphabet shares skyrocketed approximately 10% following a blockbuster earnings report that featured a 62% surge in Google Cloud revenue and positive AI commentary. Industrials also saw a significant boost as Caterpillar shares rose nearly 10% on robust quarterly results, helping the Dow outperform its peers. In contrast, Meta Platforms and Microsoft saw their stocks decline by 9% and 4%, respectively, as investors reacted to concerns over massive increases in artificial intelligence capital expenditures.

The Bureau of Economic Analysis reported that U.S. real GDP grew at an annual rate of 2.0% in the first quarter of 2026, a sharp recovery from the 0.5% growth seen in the previous quarter. While the figure slightly missed economist expectations of 2.3%, the growth was supported by strong business investment in AI equipment and software as well as a rebound in government spending. However, consumer spending showed signs of cooling as persistent inflation began to impact household purchasing power.

Energy markets remained highly volatile as oil prices surged toward four-year highs amid a U.S. naval blockade of Iranian ports before easing later in the session. Treasury yields retreated slightly following the GDP report, with the 10-year note falling to 4.38% and the 2-year note dipping to 3.87%. Market participants are closely watching the conflict's impact on inflation, with some analysts warning that elevated energy costs could delay Federal Reserve interest rate cuts until 2027.