Market participants returned from a long holiday weekend only to be greeted by downbeat economic data, rising Treasury yields and higher prices for crude oil.
Economic data from overseas set the mood early in the session. China reported its slowest rate of growth in services activity in eight months, while a survey in Europe revealed a steeper-than-forecast decline in business activity in the euro zone. In a separate development that added to concerns about global growth, prices for crude oil rose after Saudi Arabia and Russia announced a new extension to their voluntary supply cuts.
News on the U.S. economy was likewise disappointing. U.S. factory orders dropped 2.1% in July, the Commerce Department said Tuesday. Although that was better than economists’ forecast for a decline of 2.3%, July marked the first drop in orders for U.S. manufactured goods after four straight monthly increases.
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Rising Treasury yields also weighed on stocks, especially those in more rate-sensitive sectors. At the closing bell, the blue-chip Dow Jones Industrial Average slipped 0.6% to 34,642, while the broader S&P 500 declined 0.4% to finish at 4,496. The tech-heavy Nasdaq Composite held up comparatively well, slipping less than 0.1% to close at 14,020, helped in no small part by Tesla (TSLA).
Tesla reverses course after last week’s selloff
Tesla stock bounced back from a selloff of more than 5% on Friday to jump 4.7% on Monday. The electric vehicle maker, which has a weighting of almost 3% in the Nasdaq-100, added about $37 billion in market capitalization in the process.
TSLA has more than doubled in 2023, but a series of price cuts to vehicles have added volatility to an already dramatic stock, knocking shares off their mid-July high. Whether investors are interested in Tesla as one of the best green energy stocks or for its market-beating potential through year-end and beyond, Wall Street is close to being split on the name.
Of the 41 analysts covering Tesla surveyed by S&P Global Market Intelligence, 11 rate it at Strong Buy, four say Buy, 20 call it a Hold, one says Sell and one has it at Strong Sell. That works out to a consensus recommendation of Buy, albeit a tepid one.
For Tuesday, at least, Tesla was a big winner, and that helped mitigate widespread selling pressure in a turbulent session.
