Stocks rebound, AI in Big Tech, Tesla: Trading Takeaways

After a tumultuous start to the second quarter, stock market indices (^DJI, ^IXIC, ^GSPC) are seeing a solid day of green to kick off the trading week. Closing back above 5,000, the S&P 500 has snapped its six-day losing streak shared with the Nasdaq Composite.

Yahoo Finance Markets Reporter Josh Schafer details the biggest trends moving stocks ahead of earnings for Big Tech companies, including whether AI will be giving tech companies another big push this earnings season and everything on Tesla's (TSLA) plate as the EV maker is set to report quarterly results on Tuesday, April 23.

For more expert insight and the latest market action, click here to watch this full episode of Market Domination Overtime.

This post was written by Luke Carberry Mogan.

Video transcript

- Josh, the S&P 500 snapping that six-day losing streak, where do you see things going now from here?

JOSH SCHAFER: Yeah, other Josh, the better Josh, Josh Lipton, I think, really hit the nail on the head, just talking about the market action and the fact that we actually stayed higher today. This is something that we've been watching over the past week as actually looking at something like a five-day chart, and you can see here we have been going up, and then you fall at the end of the day. Up, and then you fall at the end of the day. So I think just seeing a little bit of resilience in this market, knowing that essentially maybe we have some level of stability at the current levels that we're at is probably a positive for investors,

I think, and then I think, guys, just thinking about where the action was today, it stuck out to me to see several sectors up. It's not like we just saw a big tech rally, like, yes, NVIDIA, I'm looking at, was up over 4%. But when you look broadly across the S&P 500, I'm looking at the YFi Interactive right now, you have four sectors that were above-- that outperform the S&P 500. Yes, you have tech. But you also have utilities. You have consumer staples, and you have financials.

So it's a little bit of that story we've been talking about over the last two months now of some level of a broadening out, and maybe it not all being tech, and it's interesting to me, I think, to see that that's where buyers came back in here. It's not just the big tech names that we talked a lot about on Friday when the NASDAQ fell, but people still wanting to get into the other trade outside of tech.

- Yeah, what's your sense of what big tech Josh? I mean, you think they can just report and beat, and that's enough or no. They're going to have to really give you a bullish guidance.

JOSH SCHAFER: Isn't that what they always do?

- I think that's--

[INTERPOSING VOICES]

- You got to pretend like they don't, Josh. Otherwise, it doesn't have any drama to it.

JOSH SCHAFER: That's been the Zuck story for the last year, right? But I think it'll be interesting, Josh, specifically. I'm curious what Microsoft says about AI, and how it's contributing to revenue right now or in the next quarter or two. I know from covering the company's earnings release in the past couple quarters, it's been a little bit of OK. We're bullish on AI overall. Investors are happy about where Microsoft is in the AI space. But is any of that money coming back into the company right now?

And thus far, the answer has been no. And I think it will be interesting to see if that can maybe sway sentiment because I do think that's a large part of the story at the end of the week. It is, what do we learn about the AI narrative overall? Where we investing more in that? Is the investment more going to help a company like NVIDIA where they're buying ships from? Is it going to help other companies outside of them? I think that's the broad read through when it comes to that.

- And expectations are so high. I mean, Netflix was a tech company. We saw a report last week, and they saw their stock fell because they didn't beat and raise, and I think that was an expectation. So you wonder with some of these tech names, what could happen there? But you're also watching Tesla.

JOSH SCHAFER: And their expectations are not high.

- I mean, exactly.

JOSH SCHAFER: Expectations are not high at this point. And I think this will be an interesting one to watch for me going into it Tesla reports earnings after the bell on Tuesday because the expectations aren't high. We're finally at a place I think with Tesla where maybe the expectations are starting to become a little bit more realistic, and you wonder if Elon can say something on the call that actually reinvigorates some confidence in this company. It feels like we just haven't had a positive headline on Tesla in a month.

- You would want-- I think, if you were a Tesla investor, you'd wait for the call, and you would hope Elon Musk would just give a lot more details about the smaller car on the way or what exactly is going to happen at this big robotaxi event over the summer. But whether you're going to get that, I have no idea.

JOSH SCHAFER: Yeah, no, I mean, that's how the stock has moved in the past, is a little bit on some of the pie in the sky ideas. The things that aren't actually coming next quarter are going to contribute to earnings this year, but some great idea like a Cybertruck that might come five years after they actually announce it. And I think that little tidbit and maybe clarity on that low-cost car or just margins, and where we're going to get with that margin story? Have we fully bottomed? Is that coming back? There's a lot of questions going into the call, and it will be interesting to see in this environment for a stock that's down over 40% this year. Is there more pain ahead or are we finally seeing or perhaps maybe enough coming out of that stock to rebound?