Wall Street rallies for a 3rd straight day, sending S&P 500 up 2%

NEW YORK (AP) - U.S. stocks rallied further as better-than-expected profits for U.S. companies piled up, though CEOs say they're unsure whether it will last because of uncertainty created by President Donald Trump's trade war. The S&P 500 jumped 2% Thursday for its third straight day of big gains. The Dow Jones Industrial Average added 1.2%, and the Nasdaq composite climbed 2.7%.

ServiceNow surged after the AI platform company delivered a stronger profit for the start of 2025 than expected. Southwest Airlines likewise reported stronger-than-expected results, but it joined a lengthening list of companies that have pulled financial forecasts because of uncertainty around tariffs.

THIS IS A BREAKING NEWS UPDATE. AP's earlier story follows below.

NEW YORK (AP) - U.S. stocks are rallying further Thursday as better-than-expected profits for U.S. companies pile up, though CEOs say they’re unsure whether it will last because of uncertainty created by President Donald Trump's trade war.

The S&P 500 was 1.9% higher in late trading and back within 11% of its record set earlier this year. The Dow Jones Industrial Average was up 450 points, or 1.1%, with an hour remaining in trading, and the Nasdaq composite was 2.5% higher.

ServiceNow helped drive the market higher after the AI platform company delivered a stronger profit for the start of 2025 than analysts expected. The company, whose AI agents help clients manage their customers, saw its stock jump 15.8% after it also gave a forecasted range for upcoming subscription revenue that was above what some analysts expected.

Southwest Airlines likewise reported stronger results for the first three months of the year than analysts expected. But its stock flipped between gains and losses through the morning after it also became the latest U.S. carrier to say the outlook for the economy looks so cloudy that it's pulling some of its financial forecasts for the year.

CEO Bob Jordan said the company is "controlling what we can control," and it's cutting how much flying it will do in the second half of the year. Southwest’s stock eventually pulled higher in afternoon trading and was most recently up 3.2%.

Rival American Airlines, meanwhile, pulled its financial forecasts for the full year and said it plans to provide an update when "the economic outlook becomes clearer." Its stock rose 3.3% after beating profit expectations for the latest quarter.

Companies across industries have been talking about how difficult it is to give financial forecasts for the year, as Wall Street typically expects them to do, because of the on-again-off-again rollout of Trump's tariffs.

U.S. stocks rallied the last two days on hopes that Trump was softening his approach on tariffs and his criticism of the Federal Reserve, which had earlier shaken markets. But China, the world’s second-largest economy, on Thursday denied it’s involved in active negotiations with the United States over tariffs, saying that any suggestion of progress in this matter was as groundless as "trying to catch the wind."

Calling Trump's policy announcements "headline turbulence," Tan Jing Yi of the Asia & Oceania Treasury Department at Mizuho Bank warned that global economies could be hurt in the long run, adding: "Sentiments swing from hopes of intense relief to inflicted economic gloom."

This week, which began with a steep loss for U.S. stocks on fears about the trade war, has been a microcosm of the severe swings markets have volleyed through as investors struggle with how to react to conditions that can seem to change by the hour. The only certainty is likely that the market will keep swinging until more clarity arrives on tariffs, which many investors expect would cause a recession unless they’re rolled back.

"It's an unhealthy market backdrop right now, and we're trying not to react too much," said John Belton, a portfolio manager at Gabelli Funds.

Households across the United States are preparing for the higher prices that economists say tariffs would bring, while the head of the International Monetary fund urged countries to move "swiftly'' to resolve their trade disputes that threaten global economic growth.

In the meantime, many U.S. companies are continuing to report stronger profit for the start of 2025 than analysts expected, while offering caution and uncertainty about the year ahead.

Toy company Hasbro was a winner and jumped 15.6% after reporting stronger profit and revenue for the latest quarter than analysts expected. It cited strong growth for its Magic: The Gathering game, among other products.

Texas Instruments rallied 6.2% after the semiconductor company likewise reported a stronger profit than expected.

They helped offset a 3.6% drop for Procter & Gamble, which fell even though the company behind Olay, Tide and Pampers reported stronger results for the latest quarter than expected. Its revenue came in below expectations, and it also cut its forecast for profit growth this fiscal year.

Procter & Gamble said it’s expecting a $200 million hit to its earnings this fiscal year because of higher costs for commodities.

At PepsiCo, CEO Ramon Laguarta said his company expects "more volatility and uncertainty" and that "consumer conditions in many markets remain subdued and similarly have an uncertain outlook."

His company's stock fell 5% after the beverage and snack maker cuts its forecast for an underlying measure of profit over 2025, citing increased costs from tariffs and subdued conditions for customers. A 25% tariff on imported aluminum for cans is among those hitting PepsiCo and other beverage makers.

In the bond market, Treasury yields continued to ease following their disconcerting run higher earlier this month. Yields usually fall when fear is dominating markets, but their surprising rise had stirred fears that the U.S. bond market was losing its status as the world's safest places to keep cash because of Trump's trade war.

The yield on the 10-year Treasury fell to 4.30% from 4.40% late Wednesday.

It sank after a report showed slightly more U.S. workers applied for unemployment benefits last week than economists expected. A separate report said sales of previously occupied homes weakened by more than expected in March.

In stock markets abroad, indexes were mixed amid modest moves across much of Europe and Asia.