On Tuesday, Tesla shares moved without a clear trend, suggesting the recent rally might be slowing down.
Before the market opened, Tesla shares rose a little, moving in step with major indexes. Investors were considering whether tensions in the Middle East might push inflation higher again.
Tesla rose last week but remains down 26% for the year, weighed down by concerns over declining profitability and heavy spending on artificial intelligence.
Two developments could help spark a more sustained rebound. Weaker-than-expected consumer price inflation data due Wednesday could support the case for the Federal Reserve to hold interest rates steady, a scenario that would make growth stocks like Tesla more attractive relative to interest-bearing assets such as bonds. A meaningful breakthrough in Tesla’s AI efforts could also lift sentiment. The company continues investing heavily in the technology as it ramps up its robotaxi service, Optimus humanoid robots and custom chip development, though Wall Street remains uncertain about when that spending will begin generating meaningful returns.
Separately, federal safety regulators said Tuesday that Tesla will recall roughly 20,000 Model 3 and Model Y vehicles due to overly bright low-beam headlights, according to Reuters. The announcement did not appear to have a significant impact on the stock.
