US and European stock markets inch higher as investors eye more earnings reports next week

JP Morgan Chase, the biggest US bank, was a bright spot for investors this week, as it reported a 52 per cent surge in first-quarter profit. AFP

Stock markets in the US and Europe eked out gains at the end of trading on Friday after a mixed set of economic data and corporate results, but investors set their focus towards next week's financial reports from major industry players.

Wall Street, in particular, is anticipating a slew of results from corporate majors to offset a number of disappointments this week: Tesla Motors, the world's biggest electric vehicle manufacturer, reported a 24 per cent decline in first-quarter profit, while Netflix, the world's biggest streaming service, said profit slid more than 18 per cent.

JP Morgan Chase, the biggest US bank, posted a 52 per cent surge in first-quarter profit. Chief executive Jamie Dimon earlier this month warned that the odds of a recession in the US have risen after a string of bank failures that raised concerns about the overall health of the banking sector in country.

Among the key companies scheduled to report next week are US technology giants, including Google owner Alphabet, Amazon, Facebook parent Meta Platforms and Microsoft. Apple will be reporting on May 4.

Other industry bellwethers are slated to report, including energy majors Chevron and TotalEnergies, food conglomerate Nestlé, and Swiss banks UBS and Credit Suisse, the former of which was rescued by the latter after it ran into financial trouble last month.

Investors are also digesting Wednesday's report from the US Federal Reserve, which said US economic activity was little changed in recent weeks, with employment growth moderating and price increases slowing down.

"Expectations for future growth were mostly unchanged as well," the US central bank said in its Beige Book, a compilation of anecdotal information on economic conditions and which is one of the key inputs in setting interest rates.

The US Federal Reserve raised interest rates in March — the ninth time since 2022 — by 25 basis points and hinted that more increases to come to rein in inflation.

Stock markets in Europe edged higher. London's FTSE added 0.2 per cent at the close, as investors pinned hopes on a turnaround in UK business activity amid a slowdown in retail sales.

Retail sales volumes declined by 0.9 per cent in March, the Office of National Statistics reported this week, as the rainy weather kept people indoors.

Clothing shops, department stores and garden centres all reported falls in their sales volumes. Economists had predicted a decrease of 0.5 per cent for last month.

Other major European indices ended higher, with Frankfurt's DAX rising 0.5 per cent and Paris' CAC 40 up 0.5 per cent.

Earlier in Asia, stock markets declined as investors were concerned that the economic uncertainty in the US will linger.

At the close of trading, Tokyo's Nikkei 225 shed 0.3 per cent, Hong Kong's Hang Seng index slid 1.6 per cent and the Shanghai Composite lost 2 per cent.

In commodities, oil prices ended up at the close of trading on Friday but still posted their first weekly loss since last month, dragged down by fears of a recession in the US and concerns about global demand for crude.

Brent settled 0.69 per cent higher at $81.66 a barrel, while West Texas Intermediate added 0.65 per cent to close at $77.87 a barrel.

Gold, meanwhile, fell 1.43 per cent, or $28.60, to end at $1,990.50. The precious metal's fall was its worst weekly decline in eight, hit by ramped up expectations that the US Federal Reserve will hike interest rates at least one more time, which lifted the dollar.