On Tuesday, U.S stocks were set for an upbeat opening, recovering from a Monday defeat in which almost 1,000 points were wiped from the Dow. Nasdaq futures gained 0.8% while the S&P 500 and Dow inched higher, which meant the market was breathing some relief from the sell-off that was triggered by inflation concerns, political uncertainty, and earnings anxiety.

Monday’s destruction saw the Nasdaq tumble by 2.6%, with the S&P 500 dipping by 2.4% and the Dow plunging to 975 points. The CBOE Volatility Index (VIX), rocketed by 14% before closing the day almost 9% higher, signaling that nerves among investors are far from calm. Gold, meanwhile, topped $3,500 overnight, reinforcing the demand for safe assets.

Alphabet Faces Threat

The regulatory framework of Big Tech is seriously narrowing, as Alphabet is feeling the pressure. With the U.S Justice Department suggesting the dismantling of the tech giant, particularly recommending the sale of its Chrome browser business. This is expected to be a major escalatory move in regulation, as big tech faces increasing antitrust scrutiny.

Alphabet shares fell more than 2% on Monday, and remained higher in premarket trading on Tuesday. Investors are preparing for the earnings report from the company that is due on Thursday, with increasing focus on how the attack of legal challenges might influence its core advertising and dominance of the browser.

Tesla Tumbles before Earnings Call

After the closing bell, there will be first-quarter results by Tesla, but the outlook is anything but promising. The stock has already dropped over 40% year to date and analysts at Wells Fargo predict a miss on earnings, due to poor deliveries and margin pressures.

The buzz around the Cybertruck has cooled off, and with Model Y demand starting to trail off, Wells Fargo reduced its estimates for 2025 by 16%. Wells Fargo’s recently lowered expectations are due to skepticism regarding Tesla’s more speculative vehicles like the Cybertruck and Optimus robot, which many consider futuristic launches in contrast to products that will lead to revenue shortly.

Verizon & Subscriber Retention

Verizon surpassed Wall Street expectations, showing a Q1 EPS of $1.19 on $33.49 billion in revenue. However, the real ‘angst’ was in disappointing subscriber numbers. Analysts had estimated the losses at 203,000 subscribers, instead the telecom giant lost 289,000 postpaid phone customers. Verizon reaffirmed its full-year guidance, but shares slid more than 2% in premarket action, as investors digested the losses and the implications they may have for future growth.

Defense Sector Situation

The situation in the defense arena could not have been simpler for Lockheed Martin and RTX. Lockheed reported much better results, an 18% spike to quarterly profits, as missiles and jets sustained their demand under geopolitical turmoil. Q1 earnings were secured at $7.28 per share, while revenue enjoyed an entry of $18 billion. The shares were up 4% in premarket trading.

In contrast, RTX saw a more than 3% share decrease despite good quarterly results. Revenues increased 5% year-over-year to $20.3 billion, and they raised their adjusted EPS to $1.47. Still, investors hardly seemed impressed, potentially searching for better forward guidance on the heels of increased defense budgets worldwide. On the other hand, Northrop Grumman tripped with a significant 49% decline in the profits for the Q1 of this year due to elevated costs associated with the B-21 Raider stealth bomber. This resulted in a charge of $477 million against earnings of $3.32 per share, whereas revenue fell 7% to $9.47 billion. Shares plummeted almost 9% in pre-market trading.

GE Aerospace surprised everyone, as adjusted EPS came in at $1.49 and revenue climbed to $9.94 billion for the first quarter. According to CEO Larry Culp, while airlines might be delaying new aircraft purchases, maintenance service demand remains firm against production issues at Boeing and Airbus. Stock gains were nearly 5% in early trading.

Tuesday’s stock market bounce is a blessing in disguise after Monday’s shocker but volatility, a key aspect in this situation, continues to grow. With tech earnings just around the corner, regulatory headwinds up against the website, the world really does continue to simmer with geopolitical tensions. In this market, it’s sensible to keep the volatile nature of the market in view and hold onto cautious optimism.