Tesla stock edged lower in early Wednesday trading, looking set to break a six-day winning streak that had added roughly 22% to its value.
The Tesla stock slipped close to 2% to $414, while broader US equity futures remained little changed ahead of the Federal Reserve’s policy announcement.
The S&P 500 inched up 0.1%, while the Nasdaq Composite slipped 0.1%.
The Dow Jones Industrial Average fared better, rising 158 points, or 0.3%.
Market awaits Fed rate cut
The Federal Reserve is scheduled to announce its decision on interest rates at 2 pm Eastern time, with markets anticipating a 25-basis-point cut.
This would mark the first interest cut this year, and after President Donald Trump took office for the second time.
Such a move would lower the target federal funds rate from the 4.25% to 4.50% range at the start of the year.
Car companies, including Tesla, stand to benefit from lower borrowing costs, which make auto financing more affordable for consumers.
However, with the cut already widely expected and Tesla stock having climbed more than 20% in recent days, traders may be cautious in anticipating further gains.
The latest rally in the Tesla stock has been driven in part by CEO Elon Musk’s purchase of about 2.6 million shares, worth nearly $1 billion.
Regulatory filings showed Musk carried out the transactions in multiple tranches on Friday.
It was his first open-market buy since February 2020, a move widely seen by investors as a strong show of confidence in Tesla’s long-term outlook.
Investors are also looking at the company’s upcoming self-driving initiatives.
Tesla launched its robo-taxi service in Austin, Texas, in June and is reportedly preparing to expand the service to Las Vegas.
Autopilot crash cases settled
Away from the trading floor, Tesla has quietly resolved two lawsuits linked to 2019 fatal crashes in California involving its Autopilot advanced-driver-assistance system, according to court filings.
Terms of the settlements were not disclosed.
The agreements come shortly after a Florida jury ordered Tesla to pay $243 million in compensatory and punitive damages over another 2019 Autopilot-related crash.
The company has since hired a new legal team and asked the court to throw out the verdict as unjustified or order a new trial.
Tesla had rejected a $60 million settlement offer in the Florida case before the jury issued its ruling.
The verdict, along with the California settlements, underscores the legal risks surrounding the company’s Autopilot and full self-driving (FSD) technologies.
While these developments highlight ongoing scrutiny of Tesla’s autonomous driving systems, they did not have a material impact on Wednesday’s trading.
The post Why Tesla stock is down around 2% today appeared first on Invezz
