1/26/2024

S&P 500 at high, Tesla shares decline

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ХОЧЕШЬ УЗНАТЬ КАК ЗАРАБАТЫВАТЬ НА НОВОСТЯХ?

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Key points:

  • The S&P 500 index hit an all-time high for the fifth straight session.
  • Tesla shares fell 12% after disappointing sales forecast.
  • Quarterly results next week from major technology companies will help investors and traders understand whether their lofty valuations are justified.

On Thursday, the S&P 500 index extended its record-breaking streak to five sessions, bolstered by positive economic indicators from the United States. However, Tesla’s share price dipped following a disappointing sales forecast.

The S&P 500 index reached a new all-time high yesterday, fueled by optimism surrounding the economic recovery and lower interest rates, as well as the potential for artificial intelligence advancements.

The S&P 500 index gained 0.53%, closing at 4,894.16 points. The Nasdaq index rose 0.18% to 15,510.50, while the Dow Jones Industrial Average climbed 0.64% to 38,049.13.

Tesla falls on forecasts for weaker sales growth

Tesla stock plummeted 12% to its lowest level in nearly a year after CEO Elon Musk dampened investor sentiment by indicating that sales growth this year will be significantly lower than previously anticipated.

Musk’s remarks on Wednesday suggested that Tesla will prioritize its focus on developing a lower-priced, next-generation electric vehicle slated to enter production at its plant in the latter half of 2025. This anticipated influx of supply is expected to stimulate demand. However, ramping up production of this new model will pose a significant challenge due to the complexities of its advanced technology.

“The challenge for Tesla is that any significant attempt to increase sales going forward will likely have to come at the expense of further falling operating margins due to the need to compete with BYD Company in China, as well as increased competition in other projects,”

– says Michael Hewson, chief market analyst at CMC Markets.

What happens to shares of other companies

Next week’s quarterly results from tech titans Apple, Microsoft, Amazon, Alphabet, and Meta Platform will provide investors with crucial insights into whether the sky-high valuations of these heavyweight firms are indeed warranted.

Notably, shares of fellow electric vehicle manufacturers Rivian Automotive and Lucid Group dipped in the wake of Tesla’s quarterly report released late Wednesday. Rivian Automotive declined by 2.2%, while Lucid Group plunged by 6.7%.

IBM’s share price soared by 9.5% after the company surpassed expectations with its full-year revenue growth forecasts. Comcast’s shares also gained ground, rising by 3.4% after the media giant exceeded quarterly revenue estimates.

American Airlines’ share price jumped by 10.3%, riding the wave of optimism generated by the airline’s broadly positive full-year earnings forecast. In contrast, Boeing’s share price tumbled by 5.7% after the US Federal Aviation Administration (FAA) imposed a production halt on the troubled 737 MAX jetliner.

ХОЧЕШЬ УЗНАТЬ КАК ЗАРАБАТЫВАТЬ НА НОВОСТЯХ?

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