Wall Street Rises as Quantum Stocks Shine and Tesla Rebounds Despite Profit Drop

Quantum Boost for the Markets

Thursday’s session started hesitantly but turned green once the White House confirmed that President Donald Trump and China’s Xi Jinping will meet on October 30. With trade tensions once again in focus, that single announcement was enough to calm investor nerves.

The Dow Jones rose 0.3%, and the Nasdaq gained 0.9%, helped by a burst of enthusiasm for quantum computing names after reports that Washington might invest directly in the sector.

Shares of IonQ (IONQ | +7.07%), Rigetti (RGTI | +9.8%), and D-Wave Quantum (QBTS | +13.81%) all surged.

Even the big players, Alphabet (GOOGL | +0.48%) and Nvidia (NVDA | +1.04%) — joined the rally.

It’s still a highly speculative corner of the market, but with Washington’s interest piqued, the narrative could be shifting.

Tesla: Strong Revenue, Weak Margins, Same Story

Tesla (TSLA | +2.28%) managed to surprise on revenue - $28.1 billion versus analyst expectations of $26.4 billion — but not on profits. The company’s net income dropped 31% to $1.4 billion, or $0.50 per share, missing consensus by four cents.

The higher costs came from increased R&D spending and additional import tariffs tied to Trump’s trade policies. Initially, investors reacted with alarm, sending the stock down 5% at the open, but a later rebound reflected confidence that Tesla’s future lies less in cars and more in AI.

As Barclays analyst Dan Levy put it, “It’s becoming clear that the automotive business isn’t Tesla’s future focus — AI applications are.” Hard to argue with that when the company trades nearly $100 above Levy’s $350 price target.

“It’s becoming clear that the automotive business isn’t Tesla’s future focus, AI applications are.” - Dan Levy, Barclay analyst

IBM: Good Numbers, Cold Reception

IBM (IBM | -0.87%) delivered solid third-quarter results: revenue up 9% to $16.33 billion and EPS up 15% to $2.65, both slightly above expectations. Yet the market punished the stock, which fell as much as 6% at the open before recovering part of the losses.

Why the cold shoulder? When you’re already up 31% year-to-date, even “good” numbers can feel underwhelming. Slower growth in Red Hat (+14% vs. +16% expected) and a 1% dip in transaction software revenue didn’t help either.

Morgan Stanley called it “sand in the growth engine” and reiterated a hold rating.

Evercore, more bullish, highlighted 27% growth in AI-driven revenue - now generating more than $9.5 billion annually - and maintained its buy with a $315 target. Personally, I’d say IBM is finally proving it can pivot, though the market clearly wants even faster execution.

Oil and Macro Updates

Oil prices jumped sharply after Washington imposed new sanctions on Russian energy giants Rosneft and Lukoil, citing Moscow’s “lack of commitment” to ending the war in Ukraine. WTI crude settled up 5.6% at $61.79, while Brent closed at $65.99.

Meanwhile, existing home sales in the U.S. surprised to the upside, and jobless claims data were delayed yet again due to the ongoing government shutdown — a reminder that macro uncertainty still looms large.

After Hours: Intel Impresses

In after-hours trading, Intel (INTC | +3.36%) jumped another 7.5% to $41.09 after beating revenue expectations with $13.7 billion, versus $13.2 billion expected. The company admitted it’s “struggling to meet all demand,” which, ironically, is a good problem to have.

Under CEO Li-Bu Tan, Intel seems to be slowly regaining its footing, with help from its government-backed partnership with Nvidia in AI chip production. After years of playing catch-up, the chip giant may finally be getting its groove back.

Looking Ahead

Markets are heading into the final stretch of earnings season with solid momentum, 86% of S&P 500 companies have beaten expectations so far, according to LSEG. That’s the kind of statistic that keeps bulls in charge, even as geopolitical and policy risks linger.

Still, I’ll be watching whether this quantum-fueled rally and the renewed optimism around AI can carry over into next week. As always, when markets start dreaming big, reality tends to show up sooner or later, often uninvited.

Daily Track: “Radioactive” – Imagine Dragons. Because on Wall Street, the future’s glowing, just don’t touch it without gloves.

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Kristoff - ChartMill

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