S&P 500: Tesla, Amazon, and Nvidia Power Tech Comeback

Dow Climbs Over 500 Points as Wall Street Rallies Despite IMF Warning

U.S. stocks surged Tuesday, snapping back from a deep sell-off as traders absorbed fresh economic risks and recalibrated positions following sharp losses. The Dow Jones Industrial Average rose 532 points, or 1.4%, while the S&P 500 added 1.2%, and the Nasdaq Composite gained 1.3%. The bounce came as markets processed a mix of earnings and a fresh economic downgrade from the International Monetary Fund.

The IMF slashed its U.S. growth forecast for 2025 to 1.8% from 2.7%, citing the impact of new U.S. tariffs. The downgrade follows President Trump’s April 2 announcement of “reciprocal” tariffs, which have pressured equities and triggered retaliatory measures abroad. The fund now places the odds of a U.S. recession at 40%, up from 25% in its prior assessment.

Can Earnings Momentum Sustain Tesla’s Bounce?

Tesla rallied nearly 3% ahead of its first-quarter earnings, due after the market close. The stock recovered from Monday’s 5.8% slide but remains down more than 50% from recent highs. Traders are watching for updates on margins and production guidance as EV competition intensifies globally.

Is Amazon Reversing the AI Cutback Narrative?

Amazon climbed 1% Tuesday after refuting reports of major pullbacks in AI infrastructure spending. The company clarified that its AWS unit is managing capacity, not scaling down investment. The stock had faced pressure Monday on fears of cooling AI demand, a key concern for chipmakers like Nvidia, which rebounded 1.5%.

Big Beats Lift 3M, GE, and Lockheed

3M jumped 6% after delivering better-than-expected earnings of $1.88 per share. GE Aerospace climbed more than 4% on stronger profits, even as revenue came in just below consensus. Lockheed Martin added 3% following a 4.5% rise in quarterly revenue and a reaffirmed full-year forecast, underscoring defense sector resilience.

Why Is the IMF Inflation Forecast a Concern?

Alongside lower growth estimates, the IMF raised its U.S. inflation outlook for 2025 to 3%, citing tariff-related supply shocks and stubborn services inflation. The Fund also increased its inflation projection for advanced economies to 2.5%. These developments could complicate the Fed’s path to rate cuts, a key market concern.

Market Forecast: Tariff Tensions and Earnings in Focus

While Tuesday’s gains helped ease technical pressure, traders remain on edge. The IMF downgrade and rising inflation expectations highlight the downside risks from tariffs. Attention now shifts to corporate earnings and Fed speak, with Tesla’s results offering a near-term catalyst. Inflation trends and global trade developments remain key variables for equity direction.

More Information in our Economic Calendar.