Tesla
stock broke a four-day rally Monday, failing to build on the previous week’s strong gains. Shares are down again Tuesday following an inflation report that was weaker than hoped.
The electric-vehicle maker closed down 2.8% at $188.13 on Monday.
It continued that fall into Tuesday and was down 2.2% at $184.07 in midday trading. The market deserves most of the blame for the early move. The
S&P 500
was off 1.1% and the
Nasdaq Composite
fell 1.2% after January’s key inflation reading came in hotter than expected. Consumer prices rose 3.1% from the same time last year. Economists were hoping for 2.9%, according to FactSet.
Faster inflation means higher interest rates for longer. Higher rates can slow economic growth. They also make buying a car with financing more expensive.
“With the market-wide sell-off…the $175 to $177 area is an important spot to hold,” says CappThesis founder Frank Cappelleri. “It’s the Feb. 5 low point and also the 61.8% retracement level of the entire 2023 advance.”
Cappelleri isn’t making a fundamental call. He is a market technician looking at charts to see where stocks can go over the short and medium-term.
Along with market moves,
Stellantis
announced an all-electric Chrysler concept car called Halcyon. It’s designed to charge fast—40 miles in a minute—and includes other cutting-edge tech including inductive charging. That’s recharging batteries without plugging in—like an iPhone on a charging pad. The Halcyon is only a concept, but signals that competition is only getting tougher for
Tesla.
Jim Reid, an analyst at
Deutsche Bank,
wrote in a Tuesday note that Monday was one of the rarer sessions in which the Magnificent Seven group of tech stocks, which includes Tesla, underperformed—ending down 0.8%. The pullback in tech sentiment led the S&P 500 to a marginal decline, it finished down 0.1%.
“But it was also a day when a more prevalent theme this year of differentiation within the mega caps was evident,” he wrote. “The reversal was led by a 2.8% decline for Tesla, which is now the second worst performer in the S&P 500 so far in 2024, down 24.3%.”
The week kicked off with high-profile criticism of the car company during the Super Bowl. Two commercials were screened during the breaks urging drivers to boycott Tesla’s self-driving technology. The ads were sponsored by technology entrepreneur Dan O’Dowd’s The Dawn Project.
O’Dowd is a longtime critic of Tesla’s driver-assistance features and wants the system turned off.
Shares of the electric-vehicle maker’s peers were also moving.
Lucid Group
was down 3.6%,
NIO
shares dropped 3.5%, and
BYD
stock gained 0.9% in Hong Kong trading.
General Motors
stock fell 2.2%.
Tesla was well off its 52-week high of $299.29, which the company reached last summer.
Trading volume of 95.5 million remained 20.3 million below its 65-day average daily volume of 115.8 million.
Write to Rupert Steiner at [email protected]
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