Stocks closed down today, primarily due to the Tesla (NASDAQ:TSLA) earnings report. Yesterday, the electric vehicle leader reported earnings for the year’s first quarter while investors watched intently. However, the company’s update disappointed, as Tesla revealed that its earnings had fallen 20% from the previous year. Tesla’s earnings mishap isn’t the only factor negatively impacting markets today, but it is likely the most prevalent.
Does this mean that stocks are preparing for a difficult quarter? Not necessarily. Let’s take a closer look at what has gone down today and assess what investors should be expecting in the near future.
Factors Pushing Stocks Down Today
Tesla came close to matching Wall Street’s estimates for its revenue and earnings per share. Unfortunately, close doesn’t cut it when you’re a company that desperately needs a positive growth catalyst. When Tesla came in just slightly below estimates, it made one thing clear: Elon Musk’s price cuts haven’t worked as well as investors had hoped. As InvestorPlace’s William White reports, this news quickly pushed EV stocks down today. However, other sectors have felt the day’s pain as well.
Many prominent tech companies, such as Apple (NASDAQ:AAPL) and Microsoft (NASDAQ:MSFT), closed down today. The broader Nasdaq index also finished the day in the red after a failed attempt to rally. Both the Dow Jones Industrial Average and the S&P 500 are closed down for the day, displaying similar trajectories to that of the Nasdaq.
Investing.com notes that recent data has pointed toward a “slowing economy,” which is likely also pushing stocks down today. However, that may not be a factor for long. While it make some time for the dust to settle, InvestorPlace analyst Luke Lango recently flagged an important economic indicator that recently flashed. As he notes, the “Coppock Curve” has historically signaled that the end of a bear market is approaching. If history is any indication, market tides will likely shift again soon.
On the date of publication, Samuel O’Brient did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
