4/24/2024

Tesla shares rose 13% in post-trading

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Key points:

  • Investors are watching quarterly reports from technology companies.
  • Tesla shares rose 13% after the report, despite negative quarterly results.
  • Ten of the 11 sectors of the S&P 500 index posted gains.

American stock indices showed strong growth at the end of trading on Tuesday. This week, traders are paying close attention to the quarterly reports of the Magnificent Seven stocks (Apple, Amazon, Microsoft, Meta Plaforms, Alphabet (Google), Tesla, Nvidia) and other large-cap companies. In particular, the activity of financial players was able to raise Tesla shares in post-trading by 13%, despite the losses indicated in the company’s report.

The Dow Jones Industrial Average rose 263.71 points, or 0.69%, to 38,503.69. The S&P 500 added 59.95 points, or 1.20%, to 5,070.55. The Nasdaq Composite gained 245.34 points, or 1.59%, to 15,696.64.

The market is waiting for reports from technology companies

On Tuesday, after markets closed, Tesla, marking the start of the tech giants’ earnings cycle, announced new electric vehicle models and quarterly revenue that fell short of analysts’ forecasts. Other tech companies such as Microsoft, Alphabet and Meta Platforms are expected to release results in the coming days.

Markets also received support from upbeat reports from companies such as General Motors, whose shares rose 4.4% following quarterly results that beat the automaker’s expectations.

Ten of the 11 S&P 500 sectors posted gains, led by communications and technology stocks.

Spotify shares jumped 11.4% after the Swedish music streaming giant reported gross profit of more than 1 billion euros ($1.1 billion) for the first time.

Danaher shares rose 7.2% after the life sciences firm beat expectations for quarterly profit and sales.

Bucking the trend, JetBlue shares fell nearly 19% as the budget carrier cut its full-year revenue forecast after lackluster earnings in the first quarter.

Focus on consumer spending index

US economic indicators released on Tuesday showed a mixed picture, with business activity slowing to a four-month low and inflation falling slightly. The decline in business activity is due to weakening demand, which may indicate a slight slowdown in economic growth in the coming months. On the other hand, a slowdown in inflation, despite rising commodity prices, may be a harbinger of easing inflationary pressures in the future.

Investors are eagerly awaiting the release of the PCE index for March, which is the Fed’s key inflation indicator. LSEG data shows markets are pricing in an interest rate cut of about 43 basis points, well below the 150 bps expected at the start of the year.

Despite some weakening of economic indicators, the market remains optimistic, interpreting them as a signal of a possible change in the Fed’s course towards a less aggressive rate hike.

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