Tesla (TSLA) and Ford Stock Tumble as Trade Fears Weigh on Auto Stocks
Today stock markets opened higher but reversed the gains, with the Tesla and Ford stocks closing 5% lower, as China-US trade tensions escalate.
Early Market Optimism Turns to Late-Day Rout
U.S. markets began the day with optimism, buoyed by speculation that the Biden administration might delay a planned 50% increase in tariffs on Chinese imports. Hopes of a pause lifted equities in early trading, with the Nasdaq opening strongly and Tesla and Ford shares opened higher. However, the mood swiftly turned negative after it became clear that the tariffs would likely proceed. What began as a 4% rally for the Nasdaq turned into a sharp 2.2% loss, with an intraday swing of 7% reflecting the intense market volatility.
Tesla’s Rollercoaster Ride
Tesla (TSLA) initially benefited from the early optimism, gapping 5% higher at the open following a strong Monday close at $223.79. But as trade tensions resurfaced, sentiment reversed sharply. Tesla closed the day down 5%, wiping out its gains and signaling renewed investor caution.,
Tesla Stock Chart Daily – The Support Below $220 Still Holding
Despite the setback, Tesla has shown relative resilience in recent weeks. The stock managed to gain around 6% last week, even as many other tech names crumbled under pressure. Over the past month, TSLA has traded in a defined range, finding consistent support around the $220 level. Still, headwinds remain. Tesla’s global EV sales in Q1 2025 fell compared to a year earlier—12,881 units of its top three models were sold, down from 17,027.
Looking ahead, Tesla has teased a more affordable EV later this year and continues to push forward with its autonomous vehicle efforts, including a proposed self-driving taxi. While delays are possible, investor enthusiasm around these initiatives has helped support the stock during broader market sell-offs.
Ford’s Slump Deepens
Ford (F) also suffered from the deteriorating trade environment. The stock started the day with a 2.5% gap higher but quickly reversed course, breaking below key support at $9 and closing at $8.70—a 5% decline on the day. That’s a significant drop from the pre-tariff pricing levels, with shares previously trading around $10.16.
The company reported a 1.3% year-over-year drop in U.S. vehicle sales for Q1 2025, totaling 501,291 units. In response to rising trade-related uncertainty, Ford launched a promotional campaign, “From America, For America,” offering employee pricing on most of its lineup through early June. The company hopes this initiative will help revive sales in the second quarter. Nonetheless, Ford’s stock is now at its lowest level since January 2021.
Outlook: Trade Turmoil Casts a Shadow Over Auto Sector
As tensions between the U.S. and China escalate, auto stocks are increasingly vulnerable. Tesla may be better positioned than its peers thanks to its innovation pipeline and stronger investor sentiment, but even it couldn’t escape today’s sharp reversal. Ford, meanwhile, faces both macro and internal pressures, and is struggling to regain momentum. With further tariff-related headlines expected this week, volatility in the auto sector is unlikely to subside any time soon.
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