Closing Bell: Dow Jumps 530 Points as Earnings Strength Offsets Tech Weakness

U.S. stocks finished mostly higher Tuesday with robust corporate earnings from industrial and defense companies, while some technology shares lagged on analyst downgrades and AI valuation concerns. 

The S&P 500 (SPX) rose 0.28%. The Dow Jones Industrial Average ($DJI) surged 1.02% or 529.85 points, led by aerospace and industrial names, and the Russell 2000 (RUT) climbed 1.65%, reflecting strength among small caps. But select mega-cap technology stocks faced pressure, and the Nasdaq-100 (NDX) slipped 0.13%. 

Energy markets also drew attention. U.S. crude oil prices retreated from session highs to near $98 per barrel. Concerns about potential Middle East supply disruptions remain; Iran told Pakistan's army chief Tuesday that Tehran ruled out talks with Washington until its demands are met, according to Reuters.  

A few things to Watch from Tuesday's trading activity: 

Industrial Earnings Momentum and Disappointment: Strong results from 3M (MMM), which rose 5.8%, and Northrop Grumman (NOC), up 4.6%, provided fresh evidence that select industrial and defense companies continue to execute despite a mixed economic backdrop. 3M delivered better than expected quarterly results and raised its outlook. Northrop Grumman earnings beat expectations. See Landing Pad Set for SPCX Earnings; Examining GE, RTX, NOC Reports  

Conversely, GE Aerospace (GE) fell 3.5% despite topping earnings expectations and raising guidance. Meanwhile, General Motors (GM) dropped 6.8% after narrowing the upper end of its full-year earnings forecast. The automaker exceeded quarterly expectations and unveiled a $20 billion multi-year share repurchase plan. Defense Spending Surge Creates Opportunity in RTX, LMT & GD 

Chinese Tech Giants Spending on Chips: ByteDance, Alibaba Group Holding (BABA), and Tencent Holdings (TCEHY) collectively ordered more than 3 million NVIDIA (NVDA) RTX PRO 5500 workstation graphics cards, with a combined value exceeding $35 billion, according to Reuters. The reported orders underscore continued investment in AI-related computing infrastructure across China's largest technology companies. 

Mega Cap Tech Pressure: Analyst caution on Apple (AAPL) and continued scrutiny of AI-related companies including CoreWeave (CRWV) weighed on portions of the technology sector. Loop Capital downgraded Apple Inc. (AAPL) to Hold from Buy and lowered its price target to $330 from $370. HSBC reiterated its Reduce rating on CoreWeave, but maintained its $39 price target. CoreWeave shares were up 1.7% Tuesday to $62.13. See Watch CRWV, AI Memory as Crude Taps $100; SPCX & NFLX Earnings After Close 

For this week's economic and earnings calendar, see Week Ahead: Can Corporate Earnings Offset Inflation Risk? 

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