Tesla trade-ins hit record high amid Elon Musk controversy
Tesla trade-ins have reportedly hit a record high amid a brand crisis linked in part to CEO Elon Musk’s involvement in the Trump administration. According to the Washington Post, Teslas made up 0.4% of all vehicles traded at traditional dealerships a year ago. That figure doubled to 0.8% in January.
unbranded – Newsworthy
U.S. stocks plunged, with the Dow closing down more than 700 points and the S&P 500 shedding over 100 points amid heightened inflation and tariff concerns.
The Fed’s preferred inflation measure, the Personal Consumption Expenditures Price Index, rose 2.5% in February in the last 12 months, in line with economists’ forecasts. However, the important so-called core PCE, which excludes the volatile food and energy sectors, rose 2.8%, more than expectations for 2.7%.
Inflation has fallen from a 40-year peak of 9.1% in 2022, but the last stretch to meet the Fed’s 2% goal has stalled. This morning’s higher-than-expected core rate raises concerns inflation will remain elevated and keep the Fed from lowering rates. Also, with tariffs expected to add to inflation, investors may worry about a resurgence in prices.
The blue-chip Dow ended down 1.69%, or 716.11 points, to 41,583.59; the broad S&P 500 index shed 1.97%, or 112.37 points, to 5,580.93; and the tech-heavy Nasdadq dropped 2.7%, or 481.04 points, to 17,322.99. The losses put all three indexes in the red for the week, with the S&P 500 and Nasdaq bleeding red in five of the last six weeks.
The benchmark 10-year yield fell to 4.259% and gold prices reached a record high as investors fled to safer assets. When Treasury prices rise, yields fall.
Stocks started off weaker on the PCE data, but selling accelerated around midday after the University of Michigan’s final read on consumer sentiment for March showed the highest long-term inflation expectations since 1993. Economists fear gloomy and fearful consumers will shut their pocketbooks and slow the economy. Consumers make up about 70% of the economy.
“If tariffs rise on April 2 as pledged, inflation will accelerate in coming months,” said Bill Adams, chief economist at Comerica Bank.
It’s also unclear if April 2 tariffs go into effect if all-out trade wars will break out, which could slow the economy and lift prices.
Canadian Prime Minister Mark Carney warned President Donald Trump on Friday that Canada was ready to implement retaliatory tariffs. However, the European Union is considering concessions to reduce the reciprocal tariffs from the U.S. that are set to increase after April 2, Bloomberg reported.
Persistent inflation would keep the Fed from cutting rates any time soon, economists said. Some have even ruled out any further rate cuts this year, despite the Fed’s own forecasts showing it leans towards two this year.
It’s “classic Fed confusion,” said Cetera Chief Investment Officer Gene Goldman. “Last week, the Fed said they still expect to cut rates twice in 2025 but also raised inflation expectations. We also learned four members now expect interest rates to be unchanged this year, up from just one in December.” After this morning’s PCE report, he “expects more Fed members to allude to fewer than two rate cuts or none this year — bad news for the markets banking on rate cuts, which could lead to market volatility.”
But “in reality, the economy isn’t as bad as what the recent selloff would leave you to believe. While tariff uncertainty remains, it’s likely not as bad as markets fear,” Goldman said.
Corporate news
- Lululemon topped analysts’ earnings estimates in the final few months of 2024, but its outlook for the first three months of this year was weaker than forecasts. Shares of the athleisure wear retailer plunged 14.19%.
- Customer engagement platform Braze beat analysts’ expectations for the last quarter of 2024. Shares gained 2.21%.
- U.S. Steel shares were fractionally higher after Semafor reported that Japan-based Nippon Steel would invest as much as $7 billion in the American steelmaker to obtain Trump’s approval for their merger.
- Disney and its ABC unit’s diversity, equity and inclusion efforts are being investigated by the Federal Communications Commission. The FCC said it wanted to see if the companies were violating “equal employment opportunity regulations by promoting invidious forms of DEI discrimination.” Disney shares dropped 2.38%
This story was updated with new information.
Medora Lee is a money, markets, and personal finance reporter at USA TODAY. You can reach her at mjlee@usatoday.com and subscribe to our free Daily Money newsletter for personal finance tips and business news every Monday through Friday.
