U.S. stocks rallied on Tuesday, with all major indexes closing higher thanks to strong earnings reports. The Dow Jones Industrial Average closed up 250 points, the S&P 500 gained over 1 percent, and the Nasdaq popped 1.6 percent. Spotify was a standout gainer, climbing 14 percent after reporting a quarterly profit of 197 million euros. While Spotify fell short of its monthly active user guidance, it still reached 615 million MAUs, up 19 percent, with premium subscribers rising 14 percent to 239 million. Other companies like Pepsi, UPS, and GE Aerospace also beat earnings, adding to the positive momentum in equities.
Tesla was set to report earnings after the bell on Tuesday, amid expectations of its first-ever decline in revenue. Despite a period of rapid growth and spending, including a $250 million podcast deal with Joe Rogan, the company has shifted focus to cost-cutting and profitability. Shares of Tesla rose 2 percent ahead of the earnings report, as investors hoped for clarity from CEO Elon Musk on the company’s plans to pivot towards “robotaxis” over more affordable entry-level EVs. Tesla shares have dropped about 40 percent this year due to concerns regarding slowing global EV demand and margins tightening from price cuts on popular models. The company recently announced layoffs of 10 percent of its global workforce, as well as an 8.5 percent decline in Q1 product deliveries compared to the previous year.
Former President Donald Trump was set to receive 36 million more shares of his social media company on Tuesday, potentially adding $1.2 billion to his net worth. Trump Media & Technology Group, the parent company of Truth Social, closed trading at $32.50, making Trump eligible for an “earnout” bonus based on stock performance above $17.50 for 20 trading days. Earnouts are incentives to reward insiders if a stock exceeds a certain threshold following a merger. The day also saw attention shift to upcoming earnings reports from Meta, Alphabet, and Microsoft later in the week, adding to the overall positive sentiment in the market.
The strong performance of U.S. stocks was driven by a series of robust earnings reports from companies like Spotify, Pepsi, UPS, and GE Aerospace. Despite Spotify falling short of its user guidance, the company reported growth in monthly active users and premium subscribers. Tesla, on the other hand, was expected to report its first-ever decline in revenue amidst concerns over slowing global demand for electric vehicles and price cuts on its popular models. CEO Elon Musk’s plans to focus on “robotaxis” raised expectations for the company’s future performance.
Former President Donald Trump’s social media company, Trump Media & Technology Group, saw its stock price rise on Tuesday, potentially adding $1.2 billion to Trump’s net worth through an earnout bonus based on stock performance. The day also marked anticipation for upcoming earnings reports from Meta, Alphabet, and Microsoft later in the week. Tesla’s earnings report, which was due after the bell on Tuesday, highlighted the company’s shift towards cost-cutting and profitability, as well as concerns over slowing EV demand and workforce layoffs. Overall, the positive momentum in equities was driven by strong earnings reports and expectations for future performance in the market.
