Markets launched a “face-ripping” rally yesterday, and they’re at it again this morning. Equities are up sharply, and they’re being joined by Treasuries. Gold is extending its losses from yesterday, while the dollar is up modestly.
No trouble finding the catalyst here: President Trump backed down on his Federal Reserve and China tariff threats. Specifically, he said he had “no intention” of firing Fed Chairman Jay Powell before his term expires in May 2026. Trump also said he’d be “very nice” to China and suggested tariff rates could “come down substantially” if US-China negotiators can reach a deal.
SPY, TLT, TSLA (2-Day % Change)
Throw in deeply oversold market conditions and extremely negative investor sentiment – and you get the S&P 500 rallying almost 5% in 24 hours. Not to mention gold dropping almost $200 an ounce from its overnight-session high to this morning. Long bond futures were also recently up two-and-a-half points in price, while 10-year Treasury yields were down more than 10 basis points.
Widely followed and widely held, Tesla Inc. (TSLA) is jumping this morning. Its Q1 results were abysmal, with revenue of $19.3 billion missing the average estimate of $21.4 billion and earnings per share coming in at 27 cents versus an estimate of 44 cents. But CEO Elon Musk said the right things in the post-earnings conference call, pledging to focus more on Tesla than his role at DOGE and promising that a planned lower-priced vehicle would go into production in this year’s first half.
In other high-profile earnings reports, Boeing Co. (BA) reported a smaller-than-forecast loss…electric utility giant NextEra Energy Inc. (NEE) beat estimates on strong power demand…and Philip Morris International Inc. (PM) topped estimates thanks to strength in its nicotine pouch business. Shares of all three companies rose in early trading.
