On Tuesday, all three major U.S. stock indices recorded gains exceeding 2.5%.
Investor sentiment was buoyed by growing optimism that the U.S. and China may soon reach an agreement to end their trade dispute.
The day’s gains fully offset the previous session’s losses.
Meanwhile, Tesla reported a 20% year-over-year drop in automotive revenue in its first-quarter earnings release after the closing bell. Its stock showed volatility in extended trading, showing a mixed investor response.
Markets Rebound in a Single Day
Stock prices surged after Treasury Secretary Scott Bessent and White House Press Secretary Karoline Leavitt hinted at the possibility of U.S.-China trade negotiations.
Leavitt emphasized that U.S. President Donald Trump’s policy goal is not to decouple the U.S. and Chinese economies, and that trade talks are proceeding smoothly.
After falling around 2.5% the previous day, the three major indices rebounded with gains of approximately 2.6%.
The Dow Jones Industrial Average soared 1,016.57 points (2.66%) to close at 39,186.98, while the S&P 500 jumped 129.56 points (2.51%) to 5,287.76.
These gains outpaced the previous day’s losses of 2.48% and 2.36%, respectively.
The Nasdaq, which had plunged 2.55% the day before, surged 429.52 points (2.71%) to finish at 16,300.42, reclaiming the 16,000 mark.
The CBOE Volatility Index (VIX), Wall Street’s Fear Gauge, dropped 3.25 points (9.61%) to 30.57.
Tesla Fluctuates in After-Hours Trading
Tesla’s stock rallied during regular trading hours.
Shares closed up 10.47 (4.60%) at 237.97 USD, buoyed by anticipation of its first-quarter earnings report.
However, the stock showed volatility in after-hours trading.
Tesla reported underwhelming results, which fell short of even lowered market expectations. Opinions were divided, with some arguing that the negative outlook was already priced in.
Tesla reported first-quarter revenue of 19.34 billion USD and adjusted earnings per share (EPS) of 0.27 USD, both below the market forecasts.
Wall Street had projected revenue of 21.11 billion USD and EPS of 0.39 USD.
Total revenue fell 9% from 21.3 billion USD a year earlier, with automotive sales plunging 20%, from 17.4 billion USD to 14 billion USD.
Net income plunged 71% to 409 million USD (0.12 USD per share) from 1.39 billion USD (0.41 USD per share) a year earlier.
Tesla’s stock has tumbled over 40% year-to-date as of Monday, with short-sellers reportedly gaining 11.5 billion USD in profits.
The company’s shares continued to fluctuate in after-hours trading.
Apple Surges 3.4%
Amid optimism surrounding a potential U.S.-China trade agreement, Tesla and other Magnificent Seven tech stocks posted significant gains.
Apple’s rise was particularly noteworthy.
Given that China is the company’s second-largest market and a crucial manufacturing hub, investors anticipated that a trade deal could ease tariff pressures and improve Chinese consumer sentiment toward Apple.
Apple shares jumped 6.58 USD (3.41%) to close at 199.74 USD.
Microsoft climbed 7.70 USD (2.14%) to 366.82 USD, while Nvidia added 1.98 USD (2.04%) to finish at 98.89 USD, both lagging the broader market rally.
Alphabet surged 4.04 USD (2.70%) to 153.90 USD, and Amazon, with its significant exposure to China, rose 5.86 USD (3.50%) to 173.18 USD.
Meta Platforms closed up 15.62 USD (3.22%) at 500.28 USD.
Boeing, 3M, and First Solar in Focus
Boeing’s stock advanced after the company agreed to sell a stake in its digital aviation solutions division to private equity firm Thoma Bravo for 10.55 billion USD.
Boeing shares gained 3.18 USD (2.00%) to close at 162.52 USD.
3M soared 10.24 USD (8.12%) to 136.33 USD on stronger-than-expected quarterly results.
Some stocks benefited from Trump’s tariff policies.
Solar equipment manufacturer First Solar skyrocketed 12.90 USD (10.53%) to 135.35 USD after the Trump administration announced plans to impose tariffs of up to 3,521% on solar products imported from Southeast Asian countries, including Thailand, Vietnam, Cambodia, and Malaysia.
