4:16pm: Stocks post best day in weeks
US stocks had a big bounce on Tuesday, snapping back from a rough start to the week with strong gains across the board.
The Dow soared 1,017 points, or 2.7%, closing at 39,187. The S&P 500 advanced 130 points, or 2.5%, to finish at 5,288. The Nasdaq rallied 430 points, or 2.7%, ending the day at 16,300.
Even the small-cap-focused Russell 2000 joined the rally, rising 2.7%. It was the strongest single-day performance for all the major indexes in weeks.
So, what sparked the optimism?
First, earnings season helped. Big names like 3M and GE Aerospace beat expectations, giving industrials a lift. Banks like JPMorgan and Citibank also posted solid numbers, thanks to strong trading revenue.
Second, the market was bouncing back from Monday’s selloff, when the Dow dropped nearly 1,000 points on worries about tariffs and some pointed comments from former President Trump about Fed Chair Jerome Powell. Tuesday’s rally helped calm some of those nerves.
There was also a glimmer of relief on the trade front. Treasury Secretary Scott Bessent hinted at a possible easing of U.S.-China tensions. Add to that some temporary tariff exemptions on electronics and auto parts, and it gave a boost to tech names like Nvidia and Tesla.
Speaking of tech, the sector rebounded hard. Apple, Microsoft, and Tesla all climbed after Monday’s slide, helping the Nasdaq post a strong gain.
And it wasn’t just tech. Every sector in the S&P 500 moved higher, with consumer discretionary and financials leading the way. Even smaller companies got in on the action, as shown by the jump in the Russell 2000.
A dip in bond yields also played a role. The 10-year Treasury yield eased to 4.38%, which tends to be good news for growth stocks.
Finally, there’s still some speculation out there—investors are watching for any shifts in trade policy or signals from the Fed, but for now, strong earnings and some positive headlines were enough to turn the tide.
3:37pm: Tesla on deck
Tesla Inc (NASDAQ:TSLA) will report its first quarter earnings after US markets close, with the electric vehicle maker expected to report declines in revenue and profits due to production challenges and softening demand.
The company is expected to report earnings per share of $0.43 on revenue of $21.81 billion, down from $0.74 and $27.2 billion for the fourth quarter of 2024.
Shares of Tesla traded hands at $241 on Tuesday afternoon, having shed about 40% in the year to date due to investor concerns about the company’s production figures and brand damage due to CEO Elon Musk’s involvement with the Trump administration.
3:14pm: Are trade tensions easing?
The S&P 500 rebounded sharply at the start of the week, climbing more than 4% to reach the 5,315-point mark on Tuesday, driven by renewed optimism over U.S.-China trade relations, according to Antonio Di Giacomo, financial markets analyst for LATAM at XS.
The turnaround followed earlier losses and reflects investors' sensitivity to geopolitical developments. A key driver of the rally was US Treasury Secretary Scott Bessent’s comments suggesting a possible easing of trade tensions with China, which helped lift market sentiment.
“This behavior shows how expectations and political narratives weigh as heavily as economic fundamentals in market performance,” Di Giacomo noted.
While the prospect of de-escalation in the trade war has buoyed confidence, Di Giacomo cautioned that political uncertainty—particularly around U.S. monetary policy—continues to fuel volatility. President Donald Trump’s recent criticism of the Federal Reserve has added to the market’s nervousness, he said.
Despite the gains, Di Giacomo emphasized that traders remain alert to any potential setbacks in trade negotiations or other macroeconomic disruptions that could shake investor confidence once again.
2:30pm: Stable market signals
Deutsche Bank analysts are urging caution in interpreting market-based inflation expectations, which have shown heightened sensitivity to equity market movements and oil prices.
While some measures, like the University of Michigan's inflation data, have surged, Federal Reserve officials have pointed to more stable market signals, particularly long-term inflation expectations. However, the analysts suggest these measures may not accurately reflect the Fed's credibility or long-term inflation outlook.
Two main factors contribute to this skepticism. First, long-term inflation measures, such as 10-year breakevens and 5y5y inflation swaps, have become increasingly correlated with shifts in the equity market, undermining their reliability as a gauge of inflation. As Deutsche Bank analysts note, "We find it hard to fundamentally justify such high correlation between inflation 5 to 10 years ahead and equities."
Second, the strong link between oil prices and market inflation expectations since 2014 means recent declines in oil prices have significantly impacted these expectations, casting doubt on their long-term relevance.
The bank argues for a broader approach to assessing inflation, suggesting that the Fed should give greater weight to alternative indicators, including its own Common Inflation Expectations (CIE) index and surveys like the NY Fed’s consumer survey and the Survey of Professional Forecasters.
1:15pm: Turnaround Tuesday
Stocks have seen a rebound after Monday’s losses, with a "Turnaround Tuesday" mood prevailing ahead of Tesla’s earnings report, according to IG's Chris Beauchamp.
Beauchamp emphasized that despite the ongoing volatility, equities are poised to trend higher in the short term. "In the short-term, the path of least resistance seems to point higher," he commented, noting that the full impact of tariffs is unlikely to be reflected in this quarter’s results.
Meanwhile, gold's record-breaking run reached a new high on Tuesday, with the precious metal hitting a record of $3,500, driven by continued investor concerns over global economic uncertainty.
Beauchamp noted that the rise comes amid growing fears related to US tariffs and Federal Reserve Chairman Jerome Powell's future.
"Trump continues to make investors fret about the outlook for the US and the global economy," Beauchamp said, adding that as long as these fears persist, gold should continue to gain.
12:32pm: Wall Street shrugs off IMF
Stocks staged a strong rebound Tuesday, with the Dow surging 2.9%—or about 534 points—marking its best single-day gain in months.
The S&P 500 was up 2.9%, and the Nasdaq rose 3.4%, as upbeat corporate earnings helped shift investor focus away from recent macroeconomic worries.
3M led gains on the Dow, while Equifax rallied after topping estimates and announcing a dividend hike.
Technology and consumer discretionary sectors outperformed, with Tesla advancing ahead of its quarterly earnings release after the bell. Despite being down 40% year-to-date, the stock saw renewed interest as traders positioned for possible upside.
Meanwhile, traditionally defensive names lagged. Shares of defense contractors such as RTX and Northrop Grumman declined, along with Halliburton, amid concerns over tariffs and softening demand.
11:52am: Tuesday's headlines
Bitcoin has climbed to its highest in almost a month, as the cryptocurrency benefited from investors selling stocks and bonds.
Swiss pharma giant Roche said it will invest US$50 billion into the US in the next five years to ensure it exports more medicines from the country than it imports, amid threats of potential tariffs on the sector from President Donald Trump.
The US Department of Justice called for powerful controls to stop Google from widening its dominance of the search engine market, as the high-stakes antitrust case began in the US Supreme Court on Monday.
3M Co (NYSE:MMM) reported better-than-expected earnings for the first quarter of 2025 on Tuesday, driven by organic growth and margin expansion, but warned that new tariffs could shave as much as $0.40 off its full-year profit.
11:15am: IMF cuts growth forecasts
The International Monetary Fund has downgraded its forecast for economic growth in most countries, predicting that tariffs will disrupt trade the world over.
Global economic growth is expected to slow to 2.8% this year from 3.3% last year, before rising 3% next year.
Three months ago, the IMF had forecast a continuation of 3.3% growth in both 2025 and 2026.
US gross domestic product growth was downgraded by the Washington-based fund to 1.8% this year, well below the 2.7% forecast in January.
For 2026, the estimate for US growth has been cut to 1.7% from the 2.1% predicted three months ago.
10:45am: Gold hits new high
Gold prices surged to a fresh all-time high on Tuesday before easing slightly, as investor anxiety over the Federal Reserve's independence and persistent global trade frictions fueled demand for safe-haven assets.
The rally followed renewed attacks by US President Donald Trump on Fed Chair Jerome Powell, including suggestions that Powell could be removed from his post. Trump's remarks stoked fears of political interference in US monetary policy, further unsettling markets.
“Combined with calls for immediate rate cuts, the remarks heightened market uncertainty and supported gold,” said Erkin Kamran, CEO of Traze.
Lingering trade tensions with China also contributed to gold’s strength, with no signs of a breakthrough in negotiations. The lack of progress raises concerns about a deeper deterioration in global trade, a scenario that tends to benefit safe-haven investments.
Geopolitical instability in Eastern Europe and the Middle East remains another key factor underpinning gold prices. However, any movement toward de-escalation could shift investor appetite back to riskier assets.
10:20am: Stable dollar sparks Wall Street comeback
Wall Street kicked off Tuesday on a high note, with all three major indexes jumping sharply at the open. The Dow surged 659 points, or 1.7%, right out of the gate, while the S&P 500 also climbed 1.7%. The Nasdaq led the pack with a 1.9% gain, up 301 points.
So, what’s behind the upbeat mood?
First off, earnings season is giving investors something to smile about. Big names like 3M and PulteGroup beat expectations with strong quarterly results, helping shift the tone from recent market gloom to a more optimistic one.
There’s also a bit of relief in the broader financial landscape. After some turbulence, the U.S. dollar and bond markets have calmed down. That kind of stability goes a long way in reassuring investors and encouraging a return to equities.
Today’s bounce is also partly a recovery move. Monday’s steep sell-off, driven by worries over former President Trump’s trade stance and his criticism of Fed Chair Jerome Powell, left markets reeling. Now, investors seem eager to recoup some of those losses.
Tech and industrial stocks played a big role in the rally too. Apple, Amazon, Microsoft, and Tesla all rebounded, while companies like GE Aerospace and 3M gave the industrials a solid boost.
And there’s a sense of anticipation in the air. With more earnings on the way—including Tesla’s report after the close—and ongoing interest in U.S. trade developments (especially talks with India), investors are cautiously optimistic.
Lastly, the dollar’s rebound helped ease concerns about currency volatility. After recently hitting a three-year low, the dollar’s stabilization today provided relief to manufacturers and others sensitive to currency swings.
Bottom line: A mix of solid earnings, market stabilization, and forward-looking optimism is giving Wall Street a much-needed lift.
7:55am: Bounce back
US stocks are expected to bounce back a tad on Tuesday after a tumultuous start to the week as financial markets were gripped by political tension and investor nerves over trade and monetary policy.
Futures markets are pointing to gains of 0.8% for the three main stock indexes, a day after the Dow Jones plunged 2.5%, S&P 500 dropped 2.4% and the Nasdaq fell 2.6%. The Russell 2000, which tracks small-cap stocks, declined 2.1%.
Earlier, Asian markets mostly finished moderately higher, apart from a small decline for Japan, while in Europe, the FTSE 100 is flat in London, while Germany's DAX is down 0.5%.
Monday's US selloff came after President Trump ramped up his criticism of Federal Reserve Chair Jerome Powell, sparking fresh worries about the central bank’s independence and where interest rates are headed.
The dollar remains weak on Tuesday, with the DXY index having revisited the three-year lows seen the day before.
Gold has rallied strongly overnight, with the spot price hitting a new high of $3,500 an ounce, while bitcoin has also caught some interest, bouncing back to levels seen almost a month ago around $88.5K.
Oil prices are on the front foot, with front-month futures for WTI up 1.4% to $63.2 a barrel.
In pre-market trading, Northrop Grumman Corp (NYSE:NOC) fell 10% as the aerospace and defense contractor cut its full-year guidance and reported earnings that missed analysts’ expectations.
Elsewhere in the sector, Lockheed Martin Corp (NYSE:LMT) was up 3.4% after Q1 results were better than expected and guidance was affirmed.
Verizon Communications Inc (NYSE:VZ, ETR:BAC) was down 4.74% premarket as it reported a larger fall in postpaid subscribers than expected in the first quarter but said it has seen better trends in April.
Halliburton Company (NYSE:HAL, ETR:HAL) fell 2.5% in premarket trading as the drilling and oil services company reported lower revenue and profit.
After the closing bell this evening, Tesla Inc (NASDAQ:TSLA) will be reporting its Q1 earnings.