The shares of the electric-vehicle maker advanced 5.3% in premarket trading after Musk’s comment. They snapped seven sessions of losses on Wednesday, but the selloffs over the year have led to a 70% slide in the stock’s value.
Major technology and growth stocks like Apple Inc (NASDAQ:AAPL), Alphabet (NASDAQ:GOOGL) Inc, Meta Platforms Inc (NASDAQ:META) and Amazon.com Inc (NASDAQ:AMZN) gained between 0.7% and 1%, helped by a decline in the 10-year Treasury yield.
“There is some element of dip buying going on, but it seems to be mainly focused on tech stocks at the moment,” said Stuart Cole, head macro economist at Equiti Capital.
“Thin liquidity is likely allowing this buying to have a bigger impact than would normally be the case.”
Wall Street’s main indexes dropped over 1% on Wednesday, with the Nasdaq hitting a 2022 closing low as rising COVID cases in China and geopolitical tensions added to fears of a likely recession in 2023.
On the data front, the U.S. Labor Department’s report is expected to show that 225,000 Americans filed for unemployment claims last week, up from 216,000 in the previous week, indicating some weakness in an otherwise tight labor market.
A strong labor market and resilient American economy have fueled worries that interest rates could stay higher for longer even though easing inflationary pressures keep alive hopes of smaller increases.
The Fed’s aggressive monetary policy tightening to tame decades-high inflation has hammered equities this year, with the benchmark S&P 500 shedding 20% and tech-heavy Nasdaq losing nearly 35% in value.
However, investor preference for high-dividend yielding stocks that are closely tied to economic health have staved off a steeper decline in the industrials-heavy Dow Jones, which is down just 9.5% on the year.
Markets are now pricing in 69% odds of a 25-basis point rate hike by the U.S. central bank in its February meeting and see rates peaking at 4.93% in the first half of next year..
At 6:18 a.m. ET, Dow e-minis were up 70 points, or 0.21%, S&P 500 e-minis were up 17 points, or 0.45%, and Nasdaq 100 e-minis were up 80.25 points, or 0.74%.
Source: Economy - investing.com
