Investors in major US technology companies are feeling relief following recent earnings reports, which suggest a solid outlook amidst shifting trade policies. Companies like Amazon and Microsoft presented forecasts indicating that demand for their products, including electronics, cloud services, and digital advertising, remains strong. These announcements have alleviated fears that tariffs could lead to profit declines.

Despite some companies, like Apple, experiencing disappointing results, many others surpassed expectations, contributing to a positive sentiment in the stock market. The tech-driven Nasdaq 100 index experienced a notable 10% rally over two weeks, suggesting a recovery after previous downturns triggered by trade tensions.

Mark Luschini, chief investment strategist at Janney Montgomery Scott, noted that investors were prepared for negative reports, but even weaker-than-expected numbers were not as dire as anticipated, allowing for a more optimistic market perspective.

However, the ongoing trade war continues to loom over the tech sector, with uncertainty about its impact on future earnings. Caution remains as companies, including those in retail and airlines, are revising their forecasts and adopting careful spending approaches, while tech giants maintain more positive outlooks.

Among the Magnificent Seven companies, four reported revenue forecasts in line with or above Wall Street estimates. Microsoft exceeded expectations due to growth in its Azure cloud services, while Amazon indicated stable demand despite a less favorable profit outlook. Meta reassured investors with an ad-spending forecast in line with analyst estimates.

In terms of capital expenditure, companies like Meta and Microsoft signaled increases, alleviating concerns about spending cuts in artificial intelligence. This has positively impacted shares of semiconductor and hardware companies.

Despite some setbacks, including Tesla’s adjusted revenue growth expectations and Apple’s anticipated costs from tariffs, the overall earnings projections for the tech sector are rising. According to Bloomberg Intelligence, earnings for the Magnificent Seven are predicted to increase by 21.6% in 2025, with revenue expected to rise 9.7%. This suggests a more favorable outlook than previously feared, reflecting a more resilient tech industry amidst broader economic challenges.

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