Dow and S&P 500 extend gains; Tesla shares fall while Trump Media surges

Investors are attempting to maintain momentum from the previous session’s gains, which were fueled by optimism surrounding the potential for narrower US tariffs, leading to a slight increase in US stocks on Tuesday.

At the time of writing, the Dow Jones Industrial Average was up 0.2%, while the S&P 500 index was also 0.2% higher from the previous close.

The Nasdaq Composite Index gained 0.4% on Tuesday. 

The NASDAQ and Russell 2000 led the market on Monday, closing up 2.3% and 2.6%, respectively.

The Dow and S&P 500 also ended the day higher, gaining 1.4% and 1.8%, respectively.

US consumer confidence dropped significantly in March, as reflected by the data released on Tuesday, showing a decreased near-term outlook on income, business, and job conditions.

However, investors largely overlooked this data.

The Conference Board’s monthly consumer confidence index decreased to 92.9, falling short of the Dow Jones’s prediction of 93.5. 

The future expectations measure experienced a significant decline to 65.2, its lowest point in 12 years.

This figure is notably lower than the 80 level, which is widely regarded as a potential indicator of an upcoming recession.

Until there’s more certainty on the tariff and macro front, sentiment and confidence remain vulnerable.

Investors were relieved Monday following reports that the White House may reduce the scope of upcoming reciprocal tariffs set to take effect April 2. 

This comes as Wall Street has been nervous about a potential rise in inflation and a decline in economic growth in anticipation of President Donald Trump’s tariffs.

Tesla stock falls

Cathie Wood, CEO and CIO of Ark Invest, expressed her optimism on Tesla shares in a Bloomberg TV interview. 

She predicted that Tesla’s stock price could reach $2,600 per share in five years.

This forecast represents an 834% increase from the stock’s closing price of $278.39 on Monday, when it surged by 12%, marking its best daily performance this year. 

Despite this recent gain, Tesla’s stock price remains over 44% lower than its all-time high in December.

On Tuesday, the stock was down nearly 1% from the previous close. 

“Tesla has certainly benefited from improved risk sentiment. Having lost over half its value in just three months, it has staged an impressive fight-back, adding 20% since Thursday’s close,” David Morrison, senior market analyst at Trade Nation, said. 

While investors are increasingly concerned that BYD could put mounting pressure on Tesla, particularly in the Chinese market, Wood dismissed these fears. 

Wood also predicted that Tesla’s robo taxis will drive most of its share growth over the next five years.

UniFirst shares tumble

UniFirst’s stock experienced a significant drop, exceeding 14%, following the announcement that Cintas had ended discussions to acquire the workwear provider. 

The potential deal was valued at $275 per share in cash. 

Cintas CEO Todd Schneider expressed in a statement that while they still believed in the potential benefits of a merger, they were unable to engage in substantive discussions with UniFirst regarding crucial transaction terms. 

As a result, Cintas decided that further discussions were not warranted at that time.

Trump Media gains

Trump Media, the parent company of Truth Social, saw its shares surge more than 9% on Tuesday. 

This increase followed the announcement of a partnership between the president’s social media company and Crypto.com. 

The collaboration aims to introduce exchange-traded funds (ETFs) and other related financial products.

This development suggests growing confidence in Trump Media and its potential within the financial markets. 

The partnership with Crypto.com, a prominent cryptocurrency platform, also highlights the company’s interest in exploring opportunities in the digital asset space. 

The launch of ETFs and related products could provide investors with new ways to gain exposure to Trump Media and potentially benefit from its future growth.