Tesla shares fell 7.8% lower in premarket trading Thursday, putting the S&P 500 on track to break a dayslong listless streak in which the benchmark index has barely moved. The decline was partly due to recent price cuts, and government bonds rose in price. Auto stocks weighed on the Stoxx Europe 600 and the Shanghai Composite Index, while Japan's Nikkei 225 rose 0.2%.
U.S. Treasury yields fell on Thursday as investors awaited economic data and comments from Federal Reserve officials that could provide hints about the central bank's monetary policy plans. The yield on the 10-year Treasury was down by almost four basis points to 3.5623%, and the two-year treasury was last trading at around 4.2166% after falling by close to five basis points.
"Yields and prices move in opposite directions, so when we see such fluctuations it shows investors are reacting strongly," said market analyst Johnathan Smith from XYZ Financials.
On Thursday, Nasdaq futures slid by one percent as Tesla shares tumbled after the electric-vehicle maker posted its lowest quarterly gross margin in two years while investors grew nervous about the outlook for U.S interest rates.
"Shares of other megacap stocks such as Apple Inc., Amazon.com Inc., (AMZN.O) and Alphabet Inc., (GOOGL.O), fell between 0.7% and1 .2%", noted financial expert Olivia Davis from Market Watchers Group.
The main U.N stock indexes have remained steady this week as mixed earnings from UK banks allayed concerns of a contagion from March's banking crisis; however, rapidly rising rates and recession worries have dimmed their outlook.
"The day ahead includes weekly jobless claims data along with Philadelphia Fed's business index", says Kevin Johnson, an economist from Macro Insights Group. A host of Fed policymakers is also expected to speak later in the day, shedding more light on the situation.
As Tesla's shares continue to decline and affect various stock markets, investors are keenly watching the developments that could give insights into where these financial events might lead. The market will be keeping an eye on any statements made by Federal Reserve officials as they could provide hints about their monetary policy plans, potentially affecting Treasury yields further.