Nasdaq plunges almost 5% while Tesla falls and Nikola emerges

Nasdaq plunges almost 5% while Tesla falls and Nikola emerges

Investors braced for another bloody day in Wall Street as the Nasdaq had its worst performance with Tesla recording its biggest one-day drop.

The Nasdaq Composite closed at 10,847.69 as tech stocks continue to fall this week. The Dow Jones Industrial Average also took a beating in the process with a 2.25% drop while the S&P 500 went down 2.8%.

Analysts who were bearish on Tesla were right and it looks like things may turn worse as battery day approaches this September 22.

As for the other major companies, Apple dropped around 6.7% while Facebook and Amazon were both down more than 4%. The S&P 500 tech sector dropped 4.6% and closed Tuesday’s session more than 11%.

Tesla’s inclusion in the S&P 500 out of the picture

Just when investors thought that Tesla would be included in the top U.S. companies through the S&P 500, it looks like it did not push through.

Last Friday, Tesla already showed signs of weakness dropping more than 6% after hours after Etsy, Teradyne, and Catalent were added to the S&P 500 Index.

After Tesla showed signs of weakness at the trading open with nearly a 14% drop, Elon Musk’s electric vehicle maker slumped further up to 21%.

Tesla also said last week that they would sell up to US$5 billion [AU$ 6.9 billion] in new stock which resulted in almost a 5% drop the following day. As of this writing, Tesla is currently hovering above 6.9% in after-hours trading.

Nikola skyrocketed after General Motors takes 11% stake

Replacing the spotlight in Tesla, Nikola is currently making some huge moves this week. The electric truck maker’s stock price went as high as 53% after reports came out that General Motors (GM) got a US$2 billion stake in Nikola.

GM CEO Mary Barra sees this move as a huge growth opportunity in an interview on CNBC’s Squawk Box. In addition to the stake, GM also has the right to nominate one board member in exchange for in-kind services.

Nikola and GM are working together to combine their technology to make the best eco-friendly trucks in the world. Under the partnership, GM will produce Nikola’s marquee hydrogen fuel cell electric pickup truck the Badger by the end of 2022.

As far as stock futures are concerned, it looks like Nasdaq and the rest of the U.S. markets are trying to bounce back recovering from the tech sell-off. While analysts are looking into this move as a correction phase, investors are on the watch if Wall Street could aim for a green day after the heavy beating.

Featured image courtesy of Sami Keinänen/Flickr

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