Updates to mid-afternoon trading

By Stephen Culp and Niket Nishant

NEW YORK, April 30 (Reuters) - U.S. stocks advanced on Thursday and the S&P 500 and the Nasdaq headed for their biggest monthly gains in years as solid corporate earnings helped investors look past a war-related oil supply shock that has rattled markets and sent crude prices to four-year highs.

But oil prices LCOc1, CLc1 eased as investors prepared to close the book on April with solid gains. The S&P 500 and the Nasdaq were on course for their biggest monthly percentage gains since the Covid crash recovery in 2020.

Industrials .SPLRCI, powered by Caterpillar shares, put the Dow out front, while technology contained the Nasdaq's gains in the wake of a spate of high-profile quarterly results released late Wednesday.

Four members of the Magnificent Seven group of artificial intelligence-related megacaps reported late Wednesday: Alphabet GOOGL.O, Amazon AMZN.O, Meta Platforms META.O and Microsoft MSFT.O. Of those, only Alphabet shares were in positive territory, jumping 9.7% after reporting a record quarter for its cloud unit.

Amazon was off 0.4%, while Meta and Microsoft slid 7.8% and 4.7%, respectively, on concerns over artificial intelligence-related expenditures.

Apple AAPL.O, another Magnificent Seven constituent, was slated to report after the bell.

The Dow Jones Industrial Average .DJI rose 738.90 points, or 1.51%, to 49,600.71, the S&P 500 .SPX gained 63.31 points, or 0.89%, to 7,199.26 and the Nasdaq Composite .IXIC gained 204.35 points, or 0.83%, to 24,878.32.

Of the 11 major sectors in the S&P 500, only technology .SPLRCT was red, while communication services .SPLRCL and industrials .SPLRCI led the gainers.

CRUDE PRICES, INFLATION AND THE FED

A raft of economic data showed the U.S. economy grew by 2.0% in the first three months of 2026, while initial jobless claims dipped to their lowest since 1969 and soaring energy prices kept year-on-year inflation above 3%, thwarting hopes of near-term rate cuts from the Federal Reserve as Jerome Powell's eight-year tenure as chair draws to a close.

"For now, we can label (inflation) as transitory," said Peter Cardillo, chief market economist at Spartan Capital Securities in New York. "However, if the war continues and energy prices do not come down from the present levels, that transitory inflation will become constant inflation and certainly a major headache for the Federal Reserve."

On Wednesday, in its most divided vote since 1992, the central bank let its key interest rate stand, while acknowledging uncertainties related to heightened crude prices due to the conflict in the Middle East.

That conflict showed no sign of abating, with Iran warning of retribution if the United States abandons its ceasefire and renews its attacks, suggesting that efforts to negotiate a peace deal have hit an impasse. Top U.S. military leaders were expected to brief President Donald Trump on potential military action in Iran, a U.S. official told Reuters.

The possibility of protracted war, long-term disruption of traffic in the Strait of Hormuz, and the prolonged pressure on energy prices have dampened hopes for near-term policy easing from monetary policymakers.

Eli Lilly LLY.N gained 10.3% after the drugmaker raised its annual profit forecast on sustained weight-loss drug demand.

Caterpillar CAT.N shares rose 10.1%, touching a record high following the company's reported rise in first-quarter profit due to strong demand for its power generation and construction equipment.

Advancing issues outnumbered decliners by a 3.54-to-1 ratio on the NYSE. There were 281 new highs and 47 new lows on the NYSE.

On the Nasdaq, 3,408 stocks rose and 1,237 fell as advancing issues outnumbered decliners by a 2.76-to-1 ratio.

The S&P 500 posted 29 new 52-week highs and 15 new lows while the Nasdaq Composite recorded 99 new highs and 86 new lows.