Breakfast News: Relief Rally

Breakfast News: Relief Rally

April 23, 2025

1. Tariff Tone Shifts, Futures Lift

President Trump has reined back his attack on Federal Reserve chair Jerome Powell, saying he never intended to remove him, after calling Powell a “major loser” on Monday. The president still said “I would like to see him be a little more active in terms of his idea to lower interest rates,” claiming the economy will slow unless rate cuts happen fast. S&P 500 and Nasdaq futures both soared over 2% on Wednesday morning.

• “145% is very high, and it won’t be that high”: President Trump hinted at progress in trade talks with China, saying “It will come down substantially.” Treasury Secretary Scott Bessent said he was optimistic, calling a tit-for-tat tariff war unsustainable. Asian stocks had a bullish day.
• “Significant slowdown”: The International Monetary Fund (IMF) cut its U.S. economic growth forecast to 1.8% this year from January’s 2.7% estimate, as former IMF chief economist Kenneth Rogoff put the chances of a U.S. recession at “almost 100%” if the tariff war isn’t ended.

2. Tesla’s Misses Prompt Musk Return

Tesla (TSLA 4.71%) posted first-quarter revenue and earnings misses after market close, with automotive revenue down 20% year over year. Deliveries were down, but average selling prices fell too, hitting margins as the company pushes sales incentives.

• “My time allocation to DOGE will drop significantly”: CEO Elon Musk declared he will be “allocating far more of my time” to Tesla starting May, as his government work will slow to a day or two per week. The stock jumped over 5% in after-hours trading.
• Energy storage surge: Tesla reported record installations of its Powerwall home battery storage, with the company’s Supercharger network growing 17% year over year.

3. Top Foolish Movers

Enphase Energy (ENPH 3.51%) posted year-over-year gains in first-quarter revenue and earnings yesterday, but both fell short of expectations. Q2 guidance is at the low end of analyst expectations with the future adoption of renewable energy uncertain. The Stock Advisor recommendation looks set to open around 10% down this morning.

• Up 180% over 5 years vs. the S&P 500’s 86%: Intuitive Surgical (ISRG 2.25%) closed 2.2% ahead on the back of revenue and earnings beats. The Rule Breakers rec has over 10,000 robotics surgery systems installed worldwide, up 15% from a year ago. Global growth could be hit by tariffs.
• $3 billion share repurchase: Hidden Gems rec Equifax (EFX 14.25%) soared 13.8% by market close, after posting a 4% rise in Q1 revenue with earnings per share ahead of guidance. The data and analytics company raised its dividend 28%.

4. Selected Wednesday Earnings

Boeing (BA 2.27%) will report Q1 earnings before the opening bell. Analysts predict a $1.25 loss per share, as the aircraft giant faces Chinese trade problems amid its long-running safety and regulatory issues. The stock is down 8% year to date.

• Already beating the S&P 500 by 24% since September Hidden Gems rec: IBM (IBM 2.19%) posts after the close, after beating earnings estimates in Q4 2024 thanks to a 10.4% rise in software revenue year over year. Analysts predict flat revenue this time.
• Revenue target missed in Q4 2024: We’ll have a Q1 update from enterprise software developer ServiceNow (NOW 1.37%) after the closing bell. In the final quarter of 2024, the Stock Advisor rec beat earnings predictions but softened its guidance for the latest quarter. Watch for news on its $2.85 billion acquisition of AI start-up Moveworks.

5. Foolish fun

Fool analyst Jason Moser yesterday wrote to Epic members, sharing “A recent CNBC poll says that close to half of Americans today hold a negative view regarding Tesla … This survey prompts the question many investors are likely asking today: Can Tesla recover from this?”

The stock’s all-time high was on December 17, when it closed at $479.86. Yesterday, Tesla closed just shy of $238. When do you think it will hit an ATH again? Become a member to hear what your fellow Fools are saying!