Charging Ahead: Tesla’s Financial Momentum Accelerates EV Sector


Simpler Trading Team

Jul 03rd 2023  .  4 min read

Market Plays it Cool in Anticipation of Holiday Week

In the light of an upcoming holiday and a relatively quiet economic calendar, the stock market opened with minimal fluctuation. A slight upward tick in interest rates due to recent strong economic data was observed, and the consumer discretionary sector experienced a surge courtesy of Tesla’s impressive delivery and production figures. Futures and overnight markets indicated a calm market environment leading up to the open.

Market Seesaws and Sector Showdowns

On the stock-specific front, Tesla (TSLA) remained the star performer of the day with its shares seeing a significant hike of 6%. Tesla’s announcement of better-than-expected production and delivery figures acted as the catalyst for this substantial gain. However, not all stocks were able to bask in the same limelight. Meta Platforms (META), Alphabet (GOOG), and Microsoft (MSFT) all stumbled, succumbing to a dip in their shares despite early positive trends. The technology giant Apple (AAPL) followed suit, witnessing a similar downturn in shares, spurred by significant cuts to their Vision Pro production forecasts.

Tesla’s Drive Exceeds Expectations

Turning to earnings data, Tesla (TSLA) stood as a beacon of positive financial performance, surpassing analysts’ expectations with its reported delivery and production numbers. This news reinvigorated the electric vehicle sector as a whole, with stocks such as Rivian, Fisker, and Lucid all gaining momentum. The optimistic performance of these stocks reinforced Tesla’s financial strength and fostered confidence in the sector’s potential for continued growth.

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ISM Manufacturing Index: A Mirror to the Economy

The ISM Manufacturing Index for June slipped to 46.0% from 46.9% in May, missing expectations of 47.1%. A reading below 50.0% implies a contraction, indicating the manufacturing sector’s eight-month streak of contraction continues. This extended contraction raises concerns about the potential deceleration in the broader economy, thereby hinting at a sense of uncertainty in the upcoming months.

Total Construction Spending: A Silver Lining Amidst Concerns

In contrast to the ISM data, the construction sector breathed a sigh of relief. Total construction spending experienced a 0.9% month-over-month surge in May, outpacing the consensus of a 0.4% increase. The jump reflected a revitalized demand in new single-family housing despite the increase in mortgage rates, adding a touch of optimism to the economic climate. With private construction jumping 1.1% month-over-month and public construction up by 0.1%, the data painted a positive picture for the industry’s outlook.

Closing Bell: A Quiet Symphony Preceding the Holiday

The positive momentum reflected in Tesla’s performance had a broader effect on the stock market. Major indexes reported encouraging figures throughout the day. The Dow Jones Industrial Average started at 34,431.10, reaching a high of 34,465.60, and settling at a low of 34,286.54. The overall gain was a modest 23.50 points, an increase of 0.07% as of 12:58:40.

The S&P 500 index followed a similar trend. The index started at 4,456.88, maintaining its position with no variation throughout the day. The lowest it dipped was to 4,442.19. However, it made a comeback with an increase of 6.50 points, reflecting a growth of 0.15% as the clock struck 12:58:47.

Meanwhile, the tech-heavy Nasdaq composite displayed a robust performance. Opening at 13,816.77, it managed to climb to a high of 13,839.09, only to descend to a low of 13,773.41. The index closed the day with a gain of 28.85 points, marking an increase of 0.21% at 13:00:01.

The Russell 2000 index, which tracks small-cap stocks, also showed an upward trend. Opening at 1,896.25, the index surged to 1,903.35 and dipped to 1,883.35 throughout the trading session. However, it finished the day stronger by 7.52 points, a growth of 0.40% at 12:58:49.

Lastly, the S&P 500 VIX, often referred to as the market’s “fear gauge,” opened at 13.49, reached a high of 13.85, and then retreated back to its opening value. This represented a slight decline of 0.10 points, a reduction of 0.74%.

Thus, Tesla’s strong performance not only electrified its own stock but also seemed to bring a positive charge to the broader market.