U.S. stocks rallied on Tuesday, buoyed by positive earnings reports and upbeat economic data. The S&P 500 gained 1.2%, the Dow rose 0.69%, and the Nasdaq jumped 1.59%.
Tesla kicked off the earnings season for tech heavyweights after markets closed, reporting mixed results. Its revenue fell short of analyst estimates, but the company announced the launch of new electric vehicle models. Its shares jumped 6% in extended hours trading. Investors expect strong results from other tech giants like Microsoft, Alphabet, and Meta Platforms later this week.
Positive earnings from General Motors also contributed to the market’s rise. The automaker beat quarterly expectations, pushing its shares up 4.4%. Ten out of 11 S&P 500 sectors advanced, led by gains in communication services and technology.
Data released on Tuesday showed a slowdown in U.S. business activity in April and a slight easing in inflation rates. While input prices continued to rise, the data offered some relief from persistent consumer price increases. Investors will closely monitor the release of the March Personal Consumption Expenditures (PCE) index on Friday, the Federal Reserve’s preferred inflation gauge.
Market sentiment appeared to interpret the weaker economic indicators as positive signs, suggesting that excessive hawkishness in Fed expectations may be unwarranted.
Spotify surged 11.4% after reporting gross profit exceeding 1 billion euros ($1.1 billion) for the first time. GE Aerospace shares climbed 8.3% on a bullish full-year profit forecast. Danaher gained 7.2% after beating quarterly profit and sales expectations.
However, JetBlue shares plunged nearly 19% as the low-cost carrier trimmed its annual revenue forecast following lukewarm first-quarter results.
The strong earnings and positive economic data provided a boost to the market, with investors eagerly anticipating upcoming tech earnings and the PCE inflation gauge release.
