S&P 500 Surges Past 7,200, Dow Adds 790 Points as Caterpillar and Alphabet Earnings Lift Markets

Key facts

• S&P 500 rose 1.02% to close at 7,209.01, its first close above 7,200.
• Dow Jones Industrial Average added 790.33 points, or 1.62%, to settle at 49,652.14.
• Nasdaq Composite gained 0.89% to 24,892.31, hitting new intraday and closing records.
• Caterpillar shares jumped nearly 10% after better-than-expected quarterly results and an increased annual revenue outlook.
• Alphabet shares gained 10% after first-quarter revenue beat expectations; the company raised its 2026 capex guidance to as much as $190 billion.
• Meta and Microsoft fell 8.6% and 3.9%, respectively, on concerns over high capital expenditure and disappointing user growth.
• Brent crude futures fell 3.41% to $114.01 a barrel, and WTI dropped 1.69% to $105.07.
• The S&P 500 gained 10.4% in April, its best month since November 2020; the Nasdaq rose 15.3%, its best since April 2020.

Markets Soar on Earnings Optimism and Easing Iran Fears

Stocks surged on Thursday, propelling the S&P 500 to a fresh all-time high above 7,200, as investors cheered robust earnings from industrial bellwether Caterpillar and tech giant Alphabet, and set aside concerns about a potential escalation between the United States and Iran. The broad-market index rose 1.02% to close at 7,209.01, its first finish above that threshold. The tech-heavy Nasdaq Composite climbed 0.89% to 24,892.31, marking both intraday and closing records. The blue-chip Dow Jones Industrial Average added 790.33 points, or 1.62%, to settle at 49,652.14. The rally capped a remarkable month: the S&P 500 gained 10.4% in April, its best monthly performance since November 2020, while the Nasdaq surged 15.3%, its strongest since April 2020. The Dow ended April with a 7.1% advance, its best month since November 2024.

Caterpillar and Alphabet Lead the Charge

Caterpillar shares popped nearly 10% after the company reported better-than-expected quarterly figures and raised its annual revenue outlook. The industrial giant, widely viewed as a bellwether for the global economy, provided a glimmer of hope amid disappointing U.S. GDP data. Alphabet shares gained 10% after its first-quarter revenue beat expectations. The company also increased its 2026 capital expenditure guidance range to as much as $190 billion, signaling confidence in its long-term growth trajectory. These gains offset losses in other major tech names. Meta and Microsoft fell 8.6% and 3.9%, respectively. Meta's shares were weighed down by its latest capital expenditure plans and disappointing user growth, while Microsoft faced pressure after saying spending would reach $190 billion due to high memory costs.

Tech Spending Spree Raises Valuation Questions

The heavy capital expenditure by hyperscale tech companies has become a double-edged sword. While it bolsters GDP and infrastructure, it also fuels concerns about whether these investments will eventually translate into software-like margins. Tom Graff, chief investment officer at Facet, noted that the most important takeaway from the Magnificent Seven earnings was that investors learned nothing new. He said that while the spending on physical infrastructure is positive from a GDP perspective, worries about valuations persist. "Something that we're going to keep wrestling with until we know one way or the other is: Does this AI spend at some point turn into software-like margins, or does it not really and we need to rethink those multiples," Graff said.

Oil Prices Reverse as U.S. Weighs Extended Iran Blockade

Oil prices reversed course on Thursday, with Brent crude futures losing 3.41% to close at $114.01 a barrel and West Texas Intermediate futures falling 1.69% to settle at $105.07. The decline came after crude rose on Wednesday amid high overseas tensions between the U.S. and Iran. President Donald Trump told his aides to prepare for an extended blockade of Iran, a move that could further disrupt global oil supplies. added a layer of geopolitical uncertainty to the market outlook.

U.S. GDP Growth Disappoints in First Quarter

gross domestic product rose at a 2% annualized pace in the first quarter, an increase from 0.5% in the fourth quarter of 2025 but below the 2.2% estimate. The data underscored the uneven recovery and added context to the market's focus on corporate earnings as a driver of sentiment. Despite the GDP miss, the strong earnings from key industrial and technology companies helped lift the broader market, suggesting that investors are looking past macroeconomic headwinds toward corporate fundamentals.

Outlook: Markets Eye Earnings Season and Geopolitical Risks

With April's rally behind them, investors now turn to the remainder of earnings season and the evolving geopolitical landscape. The divergence between soaring tech stocks and declining oil prices highlights the complex forces at play. The question of whether AI-related capital spending will yield sustainable margins remains open, as does the potential impact of an extended U.S. blockade of Iran on global energy markets. For now, the market has chosen to focus on the positive signals from corporate America.

The bottom line

• The S&P 500 closed above 7,200 for the first time, and all three major averages posted strong monthly gains.
• Caterpillar and Alphabet earnings beat expectations, driving significant stock gains and lifting the Dow and broader market.
• Meta and Microsoft fell on concerns over high capital expenditure and user growth, highlighting valuation risks in big tech.
• the U.S. may extend its blockade of Iran, adding geopolitical uncertainty.
• U.S. GDP grew at a 2% annualized rate in Q1, below estimates, but strong earnings offset macroeconomic disappointment.
• The sustainability of AI-related spending and its impact on tech margins remains a key question for investors.