U.S. stocks continued their rally on Tuesday, with all the major indexes closing higher on a series of strong earnings reports.
The Dow Jones Industrial Average closed up 250 points or about 0.7 percent, the S&P 500 gained more than 1 percent, and the Nasdaq popped 1.6 percent.
Spotify was one of the day's biggest gainers, climbing 14 percent after the audio streaming giant reported a quarterly profit of 197 million euros—Spotify trades on the New York Stock Exchange but is based in Sweden. The company reported 615 million monthly active users (MAUs), up 19 percent but short of its guidance of 618 million. Premium subscribers, which make up the bulk of Spotify's revenue, rose 14 percent to 239 million.
After a period of wild growth and spending—illustrated by Joe Rogan's $250 million podcast deal—the streamer has been in cost-cutting mode, marked by deep layoffs and a focus on profitability.
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Pepsi, UPS and GE Aerospace also beat earnings, adding to the momentum in equities. Attention now turns to Meta, reporting Wednesday, followed by Alphabet and Microsoft on Thursday.
After the bell, Tesla reported its biggest revenue drop since 2012, though shares were sharply higher in after-hours trading after the automaker said it would renew its plans for a more affordable entry-level model. Many analysts are hoping for more clarity from Elon Musk in the earnings call, looking for him to articulate his plans for Tesla's future, after the mercurial CEO signaled he wanted to pivot toward so-called "robotaxis" over more affordable entry-level EVs.
Tesla shares are down about 40 percent this year, suffering from concerns over slowing global demand for electric vehicles and tightening margins as it initiates new price cuts on some of its most popular models. Last week, Tesla announced it would be laying off 10 percent of its global workforce, roughly 14,000 workers. In early April, the company said that its Q1 product deliveries fell 8.5 percent from the same period in 2023, marking the first year-over-year decline since 2020.
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Meanwhile, former President Donald Trump was set to receive 36 million more shares of his social-media company on Tuesday, adding another $1.2 billion to his net worth—at least on paper.
Trump Media & Technology Group, the parent company of Truth Social, closed trading on Tuesday at $32.50, making Trump personally eligible for the bonus—known in Wall Street parlance as an "earnout"—that was based on the stock trading above $17.50 for 20 trading days. Earnouts are incentives meant to reward insiders if a stock performs above a certain threshold for a set period of time following a merger.
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