Good morning investors! Stocks closed best month since 2020 as earnings continue to pour.
Today we cover:
US GDP
Inflation report
Apple and others report
📊 Economy and News
US Q1 GDP Disappoints but Inflation Surges on War-Driven Energy Costs
U.S. economic growth accelerated to a 2.0% annualized rate in Q1 2026, driven mainly by a rebound in government spending, though slightly below forecasts of 2.3%.
At the same time, March PCE inflation rose 0.7% month-over-month — the largest gain since 2022 — pushing the annual rate to 3.5%, the highest in nearly three years, largely due to surging gasoline prices from the US-Iran war.
Core PCE rose 0.3% as expected. Economists view the growth as temporary, while higher inflation reinforces expectations that the Federal Reserve will keep interest rates unchanged well into 2027.
Global hits:
Canada’s February GDP grows 0.2%, annualized quarterly growth likely 1.7%.
Mexico’s economy shrinks 0.8% in first quarter, missing forecasts.
Australia’s home price growth hits lowest in over a year, led by falls in big cities.
Japan steps into FX market for first time in two years to boost yen, causing USD to fall.
Jobless claims: US weekly jobless claims fell sharply by 26,000 to 189,000 in the week ended April 25, 2026 — well below expectations of 215,000 — signaling a stable labor market with little impact so far from the US-Israel war with Iran and related oil price shocks. Continuing claims also declined, and economists expect the unemployment rate to hold steady around April’s 4.3% level.
Reminder: US consumer finance watchdog narrows Biden-era anti-discrimination rule on small business lending. Elsewhere, Trump signs bill to fund DHS after lengthy shutdown over ICE operations. Lastly, Trump signs executive order expanding workers’ access to retirement plans.
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📈 Stocks
S&P 500 7,209.01 (+1.02%)
DJIA 49,652.14 (+1.62%)
NASDAQ 24,892.31 (+0.89%)
BRENT CRUDE 110.14 (-0.01%)
* Prices as of May 1st, 12:20 AM UTC
Apple and More Report
Some major names announced earnings yesterday:
Apple issued a better-than-expected revenue forecast for the current period after beating on sales and earnings in the fiscal second quarter. The stock rose about 5% in extended trading. Sales for iPhones missed estimates for the second time in three quarters, the only significant number that came up short of expectations.
Here are important figures:
iPhone revenue: $56.99 billion vs $57.21 billion expected
Mac revenue: $8.4 billion vs. $8.02 billion expected
iPad revenue: $6.91 billion vs. $6.66 billion expected
Wearables, Home and Accessories revenue: $7.9 billion vs. $7.7 billion expected
Services revenue: $30.98 billion vs. $30.39 billion expected
The company said on the earnings call that revenue in the June quarter will increase between 14% and 17% from a year earlier. Analysts were expecting growth of 9.5% to $103 billion.
Also, Apple said its board authorized an additional $100 billion in stock repurchases and declared a cash dividend of 27 cents per share, up 4%.
Sales of iPhones rose 22% in the quarter from a year earlier. Like other consumer electronics companies and device makers, Apple faces supply chain constraints, largely due to the global memory shortage that’s being driven by soaring artificial intelligence demand.
Cook said on the earnings call that the iPhone 17 is now the “most popular lineup in our history” and noted that overall revenue beat guidance “despite supply constraints.”
Reddit reported first-quarter earnings and revenue that beat analyst estimates. The company said second-quarter sales should come in the range of $715 million to $725 million, while analysts were looking for $712 million. eddit’s daily active unique users, or DAUq, rose 17% year-over-year to 126.8 million for the quarter, ahead of analyst estimates of 125.9 million. Average revenue per user, or ARPU, was $5.23, topping analyst estimates of $4.81. The company’s U.S.-specific ARPU came in at $9.63, ahead of the $8.53 that Wall Street was projecting. Total revenue jumped 69% from a year earlier, continuing a strong trend for online advertising companies after Meta and Alphabet reported their fastest growth in years. The stock went up 8% after the smashing report.
Eli Lilly reported first-quarter earnings and revenue that blew past estimates, as demand for its blockbuster weight loss drug Zepbound and diabetes treatment Mounjaro spikes. Lilly hiked its full-year sales outlook by $2 billion, and also raised its adjusted profit guidance. The company’s newly approved GLP-1 pill for obesity, Foundayo, launched in the second quarter, so its sales weren’t included in Thursday’s report. A
Interesting: Hershey says GLP-1s are driving higher gum and mint sales.
Google cloud growth tops Microsoft and Amazon as all three beat estimates on AI demand.
Musk lays out his souring relationship with OpenAI in a second day of testimony.
Surprising: Rivian renegotiates DOE loan down to $4.5 billion, adjusts capacity plans for Georgia plant. In other news, Blue Owl said it’s made 10 times its investment in SpaceX, which is headed for a record IPO later this year. Furthermore, FDA proposes excluding Novo, Lilly weight loss drugs from bulk compounding list in win for the companies.
💵 Personal Finance
Trump Administration Finalizes New Federal Student Loan Caps Starting July 2026
The Trump administration has finalized new borrowing limits on federal student loans as part of the Working Families Tax Cuts Act. Starting with loans taken out on or after July 1, 2026, graduate students will be capped at $20,500 per year and $100,000 total for graduate degrees. Students in professional programs (such as medicine, law, dentistry, and others) will face higher limits of $50,000 annually and $200,000 lifetime.
The Graduate PLUS loan program, which previously allowed unlimited borrowing, is being eliminated. Current students are exempt from the new limits for up to three years.
The changes aim to curb excessive student debt and encourage colleges to lower costs, though some programs like nursing and physical therapy are excluded from the professional degree category. Experts advise students to plan carefully, as exceeding federal limits may require more expensive private loans without forgiveness options.
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