Introduction
Thursday, April 24, 2025, saw a marked shift in sentiment across U.S. and global markets, as disappointing earnings reports from Tesla and Meta Platforms weighed heavily on the growth outlook. Major indexes retreated from recent highs, with investors reassessing valuations amid signs that corporate profit growth may be slowing faster than anticipated. Risk appetite dwindled sharply, and defensive sectors outperformed as Wall Street digested a fresh batch of mixed corporate earnings and economic data.
Background
Investor enthusiasm had been building steadily through April, buoyed by better-than-expected results from Microsoft, Alphabet, and several banks earlier in the earnings season. Hopes were high that Big Tech would once again deliver solid growth to justify lofty valuations. Meanwhile, the Federal Reserve’s perceived willingness to maintain policy flexibility offered further support to risk assets.
However, cracks began to appear after Netflix’s earnings report last week hinted at slowing subscriber growth. The mood darkened further after Tesla reported weaker-than-expected revenue and vehicle deliveries late Wednesday, and Meta offered soft guidance for the coming quarters. These reports raised alarm bells about whether the economy can sustain its current momentum without broader corporate profit resilience.
Adding to the cautious tone, the U.S. Department of Commerce reported that March durable goods orders rose only 0.2%, below consensus estimates for a 0.8% gain, signaling softness in business investment.
Today’s Market Reaction
- S&P 500: -1.2% to 5,058.45
- Dow Jones Industrial Average: -0.9% to 38,036.71
- Nasdaq Composite: -2.0% to 15,408.23
- Russell 2000: -1.4% to 2,031.78
- Tesla (TSLA): -8.7% to $162.30
- Meta Platforms (META): -5.5% to $282.45
- Nvidia (NVDA): -2.4% to $872.65
- Apple (AAPL): -1.6% to $184.70
- 10-year Treasury Yield: down 4bps to 4.28%
- Gold: +1.1% to $2,340 per ounce
- West Texas Intermediate (WTI) crude: +0.4% to $89.30 per barrel
- Bitcoin (BTC): -2.3% to $61,850
The tech-heavy Nasdaq led losses as Tesla and Meta dragged the index lower. Defensive sectors like Utilities (+0.5%) and Consumer Staples (+0.3%) outperformed, reflecting a risk-off tilt.
Analysis
The earnings disappointments from Tesla and Meta underline the market’s vulnerability to growth concerns at a time when valuations remain elevated relative to historical norms. Tesla’s earnings miss — driven by weakening EV demand in key markets like China and margin pressures — shattered expectations for an early-year recovery. Meanwhile, Meta’s cautious outlook, citing a potential slowdown in advertising spending and rising competition in the AI space, suggests that broader tech sector growth may be plateauing.
The softer-than-expected March durable goods data added to the unease, hinting that corporate capital spending might be faltering amid economic uncertainty. With the Fed entering its quiet period ahead of next week’s policy meeting, markets are left to navigate earnings landmines without much central bank reassurance.
Bond yields edged lower as investors sought safety, while gold rose past $2,340 — its highest level in nearly a month — highlighting the rising demand for havens. Volatility, measured by the CBOE Volatility Index (VIX), jumped to 18.7, its highest reading since early April.
Moreover, options markets show increased hedging activity. Put-call ratios for tech-heavy ETFs like the QQQ have risen to their highest levels in three months, indicating growing investor caution.
Short-Term Outlook
The immediate focus remains squarely on earnings. Amazon and Intel are set to report after the close today, with Apple and other tech giants due next week. Any further disappointment could exacerbate the selloff, especially given the heavy weighting of Big Tech in major indexes.
Economic data will also be critical. Tomorrow’s release of the March Personal Consumption Expenditures (PCE) inflation index — the Fed’s preferred inflation gauge — will be closely watched. A hotter-than-expected reading could reignite rate hike fears, while a softer print might offer temporary relief.
Expectations for Fed rate cuts have been dialed back in recent weeks. According to the CME FedWatch Tool, futures markets now price in only a 30% chance of a cut at the June meeting, down from over 60% a month ago.
Volatility is likely to stay elevated into next week’s FOMC decision, as investors grapple with the dual threats of slowing earnings momentum and sticky inflation.
Conclusion
April 24, 2025, served as a sharp reminder that equity markets remain highly sensitive to earnings performance and economic signals. The stumble by Tesla and Meta reignited fears that growth drivers may be losing steam just as monetary policy remains restrictive.
With crucial earnings still to come and inflation data looming, markets are poised on a knife’s edge. Traders and investors must tread carefully, balancing hopes for a resilient economy against the mounting evidence that higher rates and waning consumer demand may finally be taking their toll. How the next week unfolds could set the tone for the rest of Q2.
