Tesla Drags Down Tech Stocks as Profit, Sales Miss


Key Takeaways

  • The S&P 500 lost 0.85% on Thursday, Oct. 19, 2023, as Federal Reserve Chair Jerome Powell said the economy likely needs to slow to reduce inflation and that more interest rate hikes are possible.
  • Tesla’s profit and sales were short of forecasts, and shares of the EV giant tumbled.
  • Netflix added almost 9 million subscribers in the third quarter and announced a price hike, sending its shares skyrocketing.

U.S. equities tumbled after Federal Reserve Chair Jerome Powell suggested that policymakers will keep interest rates steady at their meeting next month but left open the possibility for more hikes in the future. Powell also said it’s likely that the economy needs to slow to get inflation in check.

The S&P 500 dropped 0.85% in Thursday’s session, and the yield on the 10-year Treasury note rose to just shy of 5%.

Genuine Parts (GFC) turned in the day’s weakest performance among S&P 500 stocks. Shares plunged 12.5% after the automobile and industrial parts dealer reported revenue below estimates and same-store sales that were flat as its U.S. auto parts group underperformed.

Tesla (TSLA) shares dipped 9.3% as the electric vehicle (EV) maker’s earnings and revenue missed forecasts after Elon Musk’s firm cut prices to boost falling demand.

Discover Financial Services (DFS) shares sank 7.9% after profit at the credit card provider plunged by a third as credit card delinquencies increased.

Netflix (NFLX) shares soared 16.1% as the biggest streaming service reported that it added almost 9 million subscribers in the third quarter and announced that it was raising prices.

An increase in subscribers also boosted earnings and revenue at AT&T (T), and its shares were up 6.6%.

Higher prices helped Union Pacific (UNP) exceed profit forecasts, and shares of the freight railroad jumped 2.1%.

American Airlines (AAL) shares added 0.8% after the airline beat profit expectations and gave an optimistic outlook for the upcoming holiday travel season.

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