Markets Stumble as Tesla Tumbles and Economic Data Disappoints


Simpler Trading Team

3 min read

Markets Stumble as Tesla Tumbles and Economic Data Disappoints

Today’s stock market opened on a cautious note, as weaker-than-expected quarterly profit at Tesla (TSLA), mixed earnings data from various sectors, and softer housing and jobs data weighed on investor sentiment. Overnight futures trading hinted at a negative start, setting the stage for a day of uncertainty and volatility. 

The apprehension surrounding the market was exacerbated by recent geopolitical tensions and inflationary concerns, making investors wary of aggressive moves.

Sector Performance and Stock Standouts

As markets declined, a few sectors took a more significant hit than others. The technology-heavy Nasdaq Composite suffered, led by Tesla’s 9.75% drop following disappointing earnings results. Traditional automakers, such as Ford (F) and General Motors (GM), also experienced declines as they followed Tesla’s lead. The downward pressure on automotive stocks contributed to the broader market’s weak performance.

In contrast, the casino industry received a boost from Las Vegas Sands’ optimistic revenue report from Macao, lifting Las Vegas Sands (LVS) and Wynn Resorts (WYNN) shares. Additionally, pharmaceutical companies showed strength as several announced positive clinical trial results and regulatory approvals.

Earning Reports we’re the topic of discussion in several of today’s sessions in the Options Trading Room. If you haven’t had the opportunity to check out our Options Open House special offer, click here

Mixed Bag of Earnings Reports

Tesla’s lower-than-expected earnings sent shockwaves through the market, as the company’s recent price cuts impacted profits, causing shares to plummet. The company’s inability to meet expectations raised concerns about the broader electric vehicle sector’s long-term viability.

AT&T (T) also posted a significant loss, with shares falling 10.43% following a reported 20% decrease in revenue compared to the same period last year. The communications giant’s struggles were primarily attributed to the ongoing challenges in its media and entertainment divisions.

On a positive note, Las Vegas Sands reported impressive quarterly Macao revenue, surpassing $1 billion for the first time since 2019. The company’s solid performance provided a much-needed boost to the struggling casino and leisure sector, which has been hit hard by the COVID-19 pandemic.

Housing and Jobs Data Cause Concern

Economic data took center stage, with weekly jobless claims coming in higher than expected at 245,000, surpassing the anticipated 240,000 claims. This disappointing figure signaled potential weaknesses in the labor market recovery, prompting further concerns about economic growth.

Additionally, existing home sales fell by 2.4% in March from the previous month, with the annualized rate of 4.44 million falling short of economists’ expectations. The decline in home sales was primarily attributed to rising mortgage rates and limited housing inventory, which have hampered the housing market’s recovery.

Market Close

As the trading day came to a close, U.S. stocks remained in negative territory. The S&P 500 fell 0.59% to 4,129.79, while the Dow Jones Industrial Average dropped 108 points, or 0.32%, to 33,720.36. The technology-heavy Nasdaq Composite experienced the most significant decline, falling 0.80% to 12,031.56. 

With mixed earnings reports and concerning economic data, market participants will closely monitor market movements in the coming days.