Tesla shares dipped on Tuesday as the electric car maker reported fewer quarterly deliveries for the first time in nearly four years, while U.S. stocks sank as investors considered whether the Federal Reserve might delay cutting interest rates.
Tesla fell 4.9%, dragging down the S&P 500 and Nasdaq. Healthcare stocks also underperformed. As the U.S. government maintained Medicare Advantage reimbursement rates, UnitedHealth (UNH.N), CVS Health (CVS.N), and Humana (HUM.N) shares fell substantially.
U.S. Treasury 10-year rates reached their highest since late November, raising investor nervousness. Recent strong U.S. economic reports put doubt on the Fed's ability to drop rates three times as expected.
Although the Fed may decrease rates this year, the 'higher for longer' story is returning. Quincy Krosby, chief global strategist at LPL Financial in Charlotte, North Carolina, said this worries the market.
The Dow Jones Industrial Average (.DJI) lost 396.61 points, or 1%, to 39,170.24. The S&P 500 (.SPX) fell 37.96 points, or 0.72%, to 5,205.81, and the Nasdaq Composite (.IXIC) down 156.38 points, or 0.95%, to 16,240.45. Wall Street's fear measure, the CBOE Volatility index (.VIX), climbed.
On March 26, 2024, outside the Nasdaq Market site in New York City, shares of Truth Social and Trump Media & Technology Group begin trading under the ticker "DJT". File photo purchase licensing rights.
San Francisco Fed President Mary Daly warned of a "real risk" of premature rate cuts and excessive inflation. President Loretta Mester said she still expects the Fed to decrease rates this year, maybe at its June policy meeting if economic evidence permitted.
Calvin Klein-parent PVH Corp. (PVH.N) shares fell, too. fell 22.2% as the store predicted an 11% first-quarter revenue drop. U.S. exchanges traded 11.12 billion shares, compared to 11.87 billion for the full session over the past 20 days.
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