US stocks climbed on Tuesday, on track for further gains as tech-focused investors prepared for a fresh wave of earnings highlighted by struggling Tesla (TSLA).
The S&P 500 (^GSPC) rose about 0.5% after staging a comeback from a six-day run of losses the previous session. The Dow Jones Industrial Average (^DJI) inched up roughly 0.4%, while contracts on the tech-heavy Nasdaq Composite (^IXIC) also stepped up 0.4%.
The gauges are looking to build on a positive start to the week that saw the S&P 500 top 5,000 for the first time since February. Stocks rebounded as investors jumped back into the likes of AI darling Nvidia (NVDA), which had lost ground amid worries about higher-for-longer interest rates.
Many in the market are looking to this week’s rush of Big Tech earnings to pull stocks out of the slump that has dogged them since the start of the year — though some on Wall Street hold out less hope.
Tesla’s earnings are likely to be a catalyst for the S&P 500, given the stock’s weight in the index. The results, due after the market close, are seen as pivotal for Elon Musk’s EV maker, whose shares have been hit hard by a disappointing delivery outlook, the cancellation of plans for a long-awaited sub-$30,000 model, and a strategy switch to robotaxis, among other headwinds.
As the first “Magnificent Seven” to report, Tesla sets the stage for highly anticipated results from Meta (META), Microsoft (MSFT), and Alphabet (GOOG) later in the week, though some suspect the megacaps’ momentum is fading.
Meanwhile, legacy automaker GM (GM) got the ball rolling on earnings on Tuesday, posting strong first quarter results and upping its full-year guidance. Its shares popped around 5%. Spotify (SPOT) stock jumped after the audio streamer swung to a profit amid an earnings beat.
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The IPO outlook headed in the right direction
There may be concern on what the Fed does or doesn’t do on rates this year, but private companies are still leaning toward coming to public markets this year.
That according to new IPO research on Tuesday by Edelman Smithfield shared exclusively with Yahoo Finance. According to the survey, about 89% of investors expect to see resumed activity in the U.S. IPO market from April to December 2024. Roughly 91% of investors are about the same or more likely to invest in future IPOs.
Edelman Smithfield surveyed 106 full-time U.S. chief investment officers, portfolio managers or buy-side analysts. At least 50% of those surveyed work for investment firms with assets under management of $50 billion or more.
I found the below graphic from the slide-deck particularly interesting. It shows how prospective investors are thinking through investing in IPOs in 2024. Take note on the balanced focus on key metrics – in other words investors in this backdrop want to see more than just a pathway to profits.
Investors want to see a lot from potential public companies in 2024. (Edelman Smithfield) -
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