Stocks closed higher yesterday, led by the tech-heavy Nasdaq with a 1.05% gain.

Tuesday afternoon's big EPS and sales surprises by SpaceX, not to mention upped rev guidance, sent shares up 7.79%. And tech stocks followed. Remember, investors are increasingly valuing SpaceX as an AI company as much as a rocket company.

And with SpaceX and Tesla forming special committees to explore a potential merger, that too has sparked excitement. In both companies.

Tesla was up 3.41% yesterday during the regular session. But they reported earnings after the close and posted a positive EPS surprise of 6.67%, and a positive sales surprise of 0.96%. That translated to a quarterly EPS growth rate of -4% vs. this time last year, and a sales growth of -0.18%. Tesla said they have the largest passenger-vehicle backlog in four years (which signals demand), and emphasized continued momentum in robotaxis, AI, robotics, and Optimus. Additionally, demand for their energy storage remains strong, citing its highest-ever order rate and backlog. They also noted that free cash flow returned to positive at $1.5B after a negative Q2. After reporting, Tesla traded mixed, plus/minus less than one percent, in either direction.

Meta reported after the close as well. They posted a positive EPS surprise of 13.5%, and a positive sales surprise of 1.88%. That equated to a quarterly EPS growth rate of 2.07%, and a sales growth of 26.1%. They guided Q4 rev above expectations at $74.5B vs. the consensus for $73.6B, or 1.22% higher. Ad revenue remains strong with impressions up 10% and avg ad prices increased by 14%. Mark Zuckerberg said the company hit "major milestones" toward "personal superintelligence," highlighting launches of Muse and Muse Wonder. They also noted that 10 million people had set up Muse personal agents. They were up 0.47% in the regular session before earnings, and jumped another 4% in after-hours trade following earnings.

Separately, it was reported yesterday that Meta was ordered to pay $25 billion in fines related to data privacy claims. Meta said they will appeal the decision.

Before the open yesterday, two other widely-held tech companies reported: Texas Instruments and IBM. TXN posted a positive EPS surprise of 9.17%, and a positive sales surprise of 2.17%. IBM posted a positive EPS surprise of 2.43%, and a positive sales surprise of 1.37%. TXN beat and issued strong-than-expected Q4 guidance, reinforcing the view that semiconductor demand remains solid. And IBM beat and raised free-cash flow guidance while citing growing enterprise AI deployment. TXN was up 2.47% yesterday. IBM was up 3.94%.

Today we'll hear from another 161 companies on deck to report, including Procter & Gamble, Union Pacific and Lockheed Martin before the open, and Western Digital, Bloom Energy and Newmont after the close.

In other news, yesterday's MBA Mortgage Applications showed the Composite Index down -5.3% w/w with Purchases down -7.3%, and Refi's down -2.0%.

And the Atlanta Fed Business Inflation Expectations came in at 2.3% y/y vs. last month's pace of 2.4%.

Today it's Weekly Jobless Claims, Leading Indicators and the Kansas City Fed Manufacturing Index.

Since everyone is following both oil and Treasury yields, let me also note that crude slipped modestly yesterday, while the 10-year saw yields increase yesterday to 5.15% from the previous close of 5.12%.

With two more days to go, all of the major indexes are up for the week.

And with earnings season in full swing, along with all of the bullish seasonal tendencies in play, that bodes well for more gains to come.

See you tomorrow,