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US stocks secured gains on Tuesday as investors prepared for a fresh batch of earnings reports, most notably Tesla. Nasdaq Composite led the trading day, surging about 1.6%. The benchmark S&P 500 rose about 1.2% after staging a comeback from a six-day run of losses on Monday. The Dow Jones Industrial Average climbed roughly 0.7%.
Tesla rose as much as 8% in after-hours trading after the company suggested its future vehicle lineup would include more affordable models. The update comes as the electric vehicle giant missed earnings expectations on both the top and bottom lines. Gross margins came in above estimates of 16.5% to hit 17.4% in the quarter.
Tesla’s earnings will likely be a catalyst for the S&P 500, given the stock’s weight in the index. Shares have been hit hard after a disappointing delivery outlook, the cancellation of plans for a long-awaited sub-$30,000 model, and a strategy switch to robotaxis, among other headwinds. As the first “Magnificent Seven” to report, Tesla sets the stage for highly anticipated results from Meta, Microsoft, and Alphabet later in the week, though some suspect the Megacaps’ momentum is fading.
The broader market is having digestion problems in and around this earnings season, with Meta expected to report after the bell on Wednesday, followed by Alphabet and Microsoft on Thursday. Trump Media & Technology Group stock is nearing a milestone that would secure Donald Trump an additional $1.1 billion if current trading levels hold until the end of the close. Trump is entitled to an additional 36 million shares if the company’s share price trades above $17.50 “for twenty out of any thirty trading days” over the next three years.
New data released on Tuesday revealed signs of a “wobble” in the US economy, with S&P Global’s flash US composite PMI reading at 50.9 in April, its lowest reading in four months. Business confidence took a hit, reaching its lowest level since November. Treasury yields fell, crude oil climbed about 1% to trade just above $83 a barrel, and gold slipped to trade around 2,343 an ounce.
The trading week saw several key earnings reports, including Spotify’s first-quarter earnings beating expectations and achieving a profit. Despite missed monthly active users, shares soared, reaching 15%. General Motors shares rose 5% after posting a beat on both top and bottom lines and raising its full-year outlook. GM also reported a reduction in battery costs for its electric vehicles, indicating a positive variable profit in its EV business in the back half of 2024.
General Electric saw shares jump 7% after posting its first quarterly report since becoming a standalone company. JetBlue shares fell nearly 20% after slashing its full-year revenue outlook due to elevated capacities in its Latin American region. PepsiCo topped Wall Street expectations in the first quarter, but recalls from its Quaker Foods North America unit hit demand, causing a 22% drop in volume. US stocks opened higher on Tuesday, with the S&P 500 rising about 0.5%, the Dow Jones increasing by 0.4%, and contracts on the tech-heavy Nasdaq Composite increasing 0.4%.
