Australia

Australian shares are poised to rise as a rally in US stocks led by Facebook owner Meta Platforms eased in after-market trading following a disappointing result at Amazon.com.

ASX futures were up 50 points or 0.7% at 7384 as of 8.00am on Friday, suggesting a positive start to trading against the backdrop of rising iron ore and oil prices.

Meta rose 18% after the company said it had added more users than investors expected in the first quarter. That gain helped send the Nasdaq Composite Index up 3.1% and boosted the S&P 500 technology sector, which was the best performing group in the index. The benchmark index climbed 2.5%, while the Dow Jones Industrial Average jumped 1.8%.

The tech sector rally could be short lived if after-market trading is any indication. Shares of Amazon.com fell 7.3% in late trading after the company posted its first quarterly loss since 2015 as sales growth slowed significantly. Intel's stock similarly fell, down 4.1% after hours as the company reported a decrease in quarterly earnings and lower demand for personal computers.

Apple shares gave up early gains in after hours trading and hovered around a 2.6% loss. The iPhone maker posted stronger-than-expected earnings and revenue, but a pessimistic outlook that cited supply chain issues, slowing demand in China and a deceleration in services weighed on shares.

Volatility in the stock market hasn't sustained at such a high level since the 2008 financial crisis, with the exception of the start of the pandemic, said John Roe, head of multiasset funds at Legal & General Investment Management. Bond volatility is the highest since the financial crisis outright, he added.

"I don't think people have a lot of conviction at all," he said. "It's a period of time when fundamental uncertainty is at a particularly high level."

Locally, the S&P/ASX 200 closed 1.3% higher at 7356.9, paring its losses from the previous three sessions amid strength from commodity stocks.

Nine of the top 11 strongest stocks were resource-related. Rio Tinto, BHP and Fortescue put on between 3.5% and 8.1% after iron-ore prices moved higher, helping the benchmark index outperform a mildly positive lead from US equities.

Sandfire Resources jumped 12% after reaffirming its FY guidance. Only AMP rose by more, surging 13% after agreeing to sell its Collimate Capital's international infrastructure equity business.

Clothing retailer City Chic was the other big mover, rising 9.5% as investors digested the prior day's trading update.

In commodity markets, iron ore rose 1.1% to $US142 a tonne; gold futures added 0.1% to $US1891.30 an ounce; Brent crude oil jumped 2% to $US107.42 a barrel.

In local bond markets, the yield on the Australian 2 Year government bond edged up to 2.36% while the 10 Year moved higher to 3.08%. Overseas, yields on US Treasury 2 Years advanced to 2.62%, while the 10 Year finished slightly lower at 2.82%.

The Australian dollar continued to fall, buying 70.98 US cents at 7.00am AEST, down from the previous close of 71.25. The Wall Street Journal Dollar Index, which tracks the US dollar against 16 other currencies, rose again to 95.89.

Asia

Chinese stocks ended mixed, with the Shanghai Composite Index extending Wednesday's rebound, with coal miners leading the gains after strong earnings.

China Coal Energy jumped 10%, China Shenhua advanced 7.7% and Yankuang Energy rose 7.0%. Builders strengthened further after the country's leader called for "all-out efforts" to boost infrastructure construction. China State Construction Engineering, China Railway Group and China Communications Construction jumped 4.2%-6.9%.

Information-technology companies weighed on the market, with Hangzhou HIK Vision and iFlytek down 1.5% and 1.8%, respectively.

The Shanghai Composite Index gained 0.6% to 2975.48, but the Shenzhen Composite Index dropped 0.7% and the ChiNext Price Index was 1.8% lower.

In Hong Kong, stocks extended gains to the third straight session, supported by tech shares. Alibaba and JD.com advanced more than 4% each, while Tencent climbed 1.5% as sentiment toward tech stocks brightened, with futures tied to the Nasdaq up more than 2%.

China Merchants Bank led the gains with a 5.7% rebound, bouncing after hitting its lowest intraday level since November 2020 on Wednesday.

Market reaction to quarterly earnings were mixed. Standard Chartered jumped 10% following strong 1Q earnings, BYD Co. gained 1.4% after its net profit more than tripled, and Chinese coal miners China Shenhua and China Coal Energy surged 8.8% and 10%, respectively, after delivering solid results. Sands China fell 2.0% after controlling shareholder Las Vegas Sands reported weaker revenue.

The Hang Seng Index rose 1.7% to 20276.17.

Japan's Nikkei Stock Average closed 1.75% higher at 26847.90 after the BOJ left monetary-policy settings unchanged but signalled a dovish stance while the Japanese Yen weakened sharply.

Gains on the Nikkei were broad-based, with auto parts manufacturer Denso Corp. jumping 9.7%, pharmaceutical firm Daiichi Sankyo climbing 7.4% and natural-gas supplier Tokyo Gas adding 6.7%.

USD/JPY was at 130.03, up from 127.71 as of Wednesday's Tokyo stock market close.

Europe

European markets gained as US stocks rose despite downbeat economic data. The pan-European Stoxx Europe 600 rose 0.6% while the French CAC 40 and German DAX added 1% and 1.35% respectively. New economic data released on Thursday showed an annualized 1.4% drop US Gross Domestic Product in the first quarter.

"It's the first quarterly fall in GDP since 2Q20, when part of the economy was shut down to contain the spread of Covid-19," Unicredit economist Daniel Vernazza says.

"Importantly, the fall in GDP isn't nearly as bad as it looks because the big detractors from GDP in 1Q22, net exports and inventories, are also the most volatile components and are likely to improve in coming quarters."

London’s FTSE 100 closed 1.1% higher on Thursday, as investors welcomed positive results from several major companies.

The blue-chip index was led by emerging markets lender Standard Chartered, with its shares soaring 14% after first-quarter profits were buoyed by rising interest rates. Smith & Nephew, the medical equipment manufacturer, closed 3.4% higher after saying it is on track to deliver its 2022 guidance following a rise in first-quarter revenue. In addition, industrial software provider Aveva rose 6.8%, bouncing back from a 16% drop on Wednesday. This helped offset declines across the mining industry--with the exception of Glencore, whose quarterly update was well received.

North America

US stocks soared Thursday, with technology stocks leading the charge, as investors cheered a solid earnings report from Meta Platforms that showed resilience in the face of rising inflation.

The Facebook owner's stock rose $30.78, or 18%, to $205.73 after the company said it had added more users than investors expected in the first quarter. That gain helped send the Nasdaq Composite Index up 3.1% and boosted the S&P 500 technology sector, which was the best performing group in the index.

The S&P 500 climbed 2.5%, while the Dow Jones Industrial Average jumped 1.8%.

In the bond market, the yield on 10-year Treasury notes ticked up to 2.862% from 2.817%. Yields and bond prices move in opposite directions. Oil prices climbed, sending shares of energy companies higher, as government officials in Germany said the country is now ready to stop buying Russian oil. Benchmark Brent oil rose 2.2% to $107.59 a barrel.

Traders said the stock market was poised for a rally following recent selloffs in tech stocks, including a big swoon earlier in April after Netflix earnings disappointed investors. With little visibility over how higher interest rates will filter through the wider economy, money managers say trading has been thin and prone to whipsaw moves in both directions.

"Nothing goes down in a straight line and nothing goes up in a straight line," said Michael Antonelli, managing director and market strategist at Baird. "You don't need a lot to move the stock market when everyone's this pessimistic."

Friday may bring a quick reversal to the tech sector's gains if after-market trading is any indication. Shares of Amazon.com fell 7.3% in late trading after the company posted its first quarterly loss since 2015 as sales growth slowed significantly. Intel's stock similarly fell, down 4.1% after hours as the company reported a decrease in quarterly earnings and lower demand for personal computers.

Apple shares gave up early gains in after hours trading and hovered around a 2.6% loss. The iPhone maker posted stronger-than-expected earnings and revenue, but a pessimistic outlook that cited supply chain issues, slowing demand in China and a deceleration in services weighed on shares.

While Thursday's gains for Meta's stock and tech more broadly were substantial, they pale in comparison to earlier-year losses. Meta's stock remains down roughly 39% so far this year, and the tech sector in the S&P 500 is off nearly 15% from where it closed out 2021. In this month alone, inflation fears, worries about profit growth and turmoil overseas sent stocks tumbling.

Volatility in the stock market hasn't sustained at such a high level since the 2008 financial crisis, with the exception of the start of the pandemic, said John Roe, head of multiasset funds at Legal & General Investment Management. Bond volatility is the highest since the financial crisis outright, he added.

"I don't think people have a lot of conviction at all," he said. "It's a period of time when fundamental uncertainty is at a particularly high level."

The US corporate world is in the throes of earnings season, and while profits and losses are moving individual stocks, analysts and traders say they are more concerned about the tenor of executives on earnings calls.

"What I want to hear in earnings reports is not whether you met or exceeded expectations, but what you see in the future," said Kristina Hooper, chief global market strategist at Invesco. She said so far this earnings season, executive commentary paints a picture that the challenges corporations face may be prolonged.

In individual stock moves Thursday, Twitter shares rose 47 cents, or 1%, to $49.11 after the social-media company posted higher revenue and withdrew financial guidance ahead of its acquisition by Elon Musk. Southwest Airlines rose 96 cents, or 2.1%, to $46.90 on forecasts that the airline will turn a profit for the rest of the year.

Caterpillar shares fell $1.52, or 0.7%, to $212.44 after the industrial bellwether said margins fell in the first quarter. McDonald's said profits were higher than analysts had expected, pushing shares up $7.05, or 2.9%, to $254.19.

On the economic front, data showed the US economy shrank at a 1.4% annual rate in the first quarter, its first contraction since the pandemic. Though the rate of decline is worrisome, some analysts said they aren't anticipating a recession given the underlying data. A big driver in the decline was a widening trade deficit, meaning the US imported far more than it exported. Consumer spending also rose during the period, a slight acceleration from the end of last year.

The data could also play a role in the Federal Reserve's decision on whether and by how much to raise rates at its next meeting, scheduled for next week.