Stocks Rebound Despite Tesla Price Cuts and Verizon Disappointment

The stock market rebounded after last week’s decline, helped by easing geopolitical tensions and upcoming earnings reports from major companies. The Dow Jones Industrial Average rose 0.7%, the S&P 500 added 0.9%, and the Nasdaq Composite gained 1.1%. Investors had been concerned about higher interest rates and mixed quarterly results, but this week’s news seems to have eased those concerns. However, Tesla shares continued to decline after the company cut prices in China and Germany, and Verizon disappointed with its quarterly revenue growth. Several major events could cause choppy trading in the days ahead, including earnings reports from Big Tech companies and the release of inflation data.

Dow Rallys with Tech Leaders, Tesla Tumbles on Price Cuts

The S&P 500 rallied on Monday, regaining momentum from its biggest weekly loss since March 2023. Investors anticipate upcoming earnings reports from major tech firms like Tesla, Facebook-owner Meta Platforms, Microsoft, and Google-owner Alphabet. Tesla shares decreased, despite the EV manufacturer announcing fresh price reductions in China and Germany, after similar decreases in the United States. Verizon Communications fell despite reporting better-than-expected performance in the first quarter, clouded by weaker cash flow. Zions Bancorporation’s stock rose after exceeding quarterly estimates, driven by reduced credit provisions. The 2-Year Treasury yield momentarily reached 5%, influenced by expectations for upcoming economic data and the Fed’s PCE price index. Salesforce withdrew from acquisition talks with Informatica, while Matterport’s stock soared due to a takeover offer from CoStar Group. Cryptocurrency-related stocks witnessed gains as Bitcoin surged following its halving event.

Energy Sector Poised for Continued Outperformance as Oil Prices Rise

According to Citi, the energy sector is expected to maintain its strong performance due to elevated oil prices driven by geopolitical risks. The sector has outpaced the broader market this year, driven by rising energy demand and production cuts from OPEC+. While the oil market has cooled following tensions between Israel and Iran, prices remain significantly higher than last year. Citi analysts foresee continued support for oil prices in the short term due to global economic growth and geopolitical uncertainties, despite reduced demand growth projections for 2025.

U.S. Stocks Gain on Monday, Led by Tech Shares

U.S. stocks opened higher on Monday, with the Dow Jones gaining over 100 points. The S&P 500 and Nasdaq also rose. Leading the gains were information technology shares, while energy shares fell. The Chicago Fed National Activity Index increased to +0.15 in March, topping market estimates. Moolec Science SA, NewGenIvf Group Limited, and SuperCom Ltd. were among the top gainers, while Vaxxinity, Inc., Hepion Pharmaceuticals, Inc., and Connexa Sports Technologies Inc. were among the top losers.

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