US Stock Market Dip: Tesla Dip 12% as Trump’s Tariffs Kicks In
Tesla's stock plummeted 12%, driven by weak sales, intensified global trade tensions, and increased competition.
US stock market dipped on Tuesday Trump’s trade war heats up. Tesla (TSLA) price experienced a significant market downturn on Tuesday, with shares plunging over 12%. This sharp decline primarily stemmed from weakening sales performance and escalating global trade tensions.
Furthermore, it’s largely attributable to the implementation of President Donald Trump’s tariffs on key trading partners, igniting a global trade war and fueling economic anxieties.
Notably, the Dow Jones Industrial Average plummeted 530 points (1.2%), extending Monday’s losses of nearly 650 points. The S&P 500 shed 0.9%, while the Nasdaq Composite declined by 0.3%, briefly flirting with correction territory.
Tesla Deflation Stack-Up Reaching 49%
Tesla’s February sales in China plummeted by 49% compared to the previous year, down to just 30,688 vehicles from 60,172. This sharp drop, following a January decline, is worrying for Tesla, especially considering competitor BYD’s booming 161% year-on-year sales increase to over 318,000 vehicles.
Adding to Tesla’s woes, European sales fell 45% year-on-year, with particularly steep declines in Scandinavian countries. Increased competition from other automakers is further pressuring Tesla.
Meanwhile, new tariffs on imports from Canada, Mexico, and China sparked a trade war. The US imposed tariffs, leading to retaliatory measures from China, Mexico, and Canada.
Moreover, this significantly impacted the automotive sector, with General Motors and Ford stock prices falling sharply. Companies reliant on international supply chains, like Chipotle, also suffered losses.
US Stock Market See Downtrend
The resulting economic uncertainty sent the S&P 500 into negative territory for the year, with widespread selling. Most S&P 500 stocks fell, and the Russell 2000 index dropped over 1%. Weak economic data fueled investor anxieties, especially impacting bank and retail stocks.
However, Market analysts expressed uncertainty about the tariffs’ longevity, but acknowledged the typical investor reaction of selling first and asking questions later.
Tuesday’s market decline saw the S&P 500 close below its Election Day level. President Trump’s address was closely watched for clues on his trade policy. All sectors of the S&P 500 were affected, with some companies like Best Buy experiencing double-digit losses due to anticipated price increases.
Nonetheless, the combination of weak Tesla sales, increased competition, and trade tensions created a negative impact on both Tesla and the broader US market, resulting in a nearly 2% year-to-date decrease in the S&P 500.
