US stock indices continued their fightback yesterday. All the majors ended in positive territory with the strongest gains posted by the mid-cap Russell 2000, followed by the tech-heavy NASDAQ 100. Stock index futures rallied further overnight but have since pulled back from their highs. Tesla reported after last night’s close. The stock soared 15% despite missing expectations on both earnings and revenues. CEO Elon Musk announced that Tesla would push to bring forward production of more affordable models to early 2025, or even to later this year, rather than the second half of 2025. Musk also said the company was investing in infrastructure for ‘full self-driving.’ Tesla’s stock price subsequently pulled back from its best levels, but was still up around 10% at the time of writing. Tesla has had a dismal start to the year thanks to aggressive price cuts eating into revenues. The cuts were in response to falling demand for EVs and to address stiff competition from China. US stock index futures also fell back from overnight highs. So far this week, the S&P 500 has made back around 50% of its April losses, so it shouldn’t be a surprise if it gives up some ground on profit-taking. It’s another busy day for earnings, with IBM, AT&T, Boeing, Ford, Hilton and General Dynamics amongst the biggest names to report. After the bell we’ll hear from another ‘Magnificent Seven’ member when Meta Platforms releases its earnings. In contrast to Tesla, Meta has had a strong start to the year thanks to its exposure to generative AI. It hit a fresh record high earlier this month, having gained close to 50% so far this year. While this week has seen an encouraging recovery in the US majors after a difficult month, stock markets may struggle to make further gains with bond yields holding at multi-month highs. The yield on the key 10-year Treasury note remains above 4.60% up from 4.18% less than a month ago. There’s also the added concern that Friday’s Core PCE update may finally follow this year’s CPI releases by showing an uptick in inflation. That would add to worries that the US Federal Reserve will further delay the timing of its first rate cut.