Dow, S&P 500, Nasdaq fall as comeback bid falters and Tesla, Apple slide

The S&P 500 (^GSPC) fell 0.2% after opening in green territory. Meanwhile, the Dow Jones Industrial Average (^DJI) shed about 0.3%, or 150 points, and the tech-heavy Nasdaq Composite (^IXIC) fell less than 0.2%.

A more than 6% slide in Tesla (TSLA) and an over 2% drop in Apple (AAPL) helped weigh down the indexes on Thursday.

Many market strategists are bullish on further gains for the S&P 500 (^GSPC) in 2025. But one signal is close to indicating it’s time to sell.

Bank of America’s Sell Side Indicator (SSI), which tracks sell-side strategists’ average recommended allocation to equities in a balanced fund, moved up to 57% in December. That’s just one percentage point shy of the “sell” signal that is usually triggered at 58%.

Given that the Sell Side Indicator is seen as a “contrarian” sentiment signal, the measure is used to decide when investors have become too bullish.

But Bank of America Securities equity and quant strategist Savita Subramanian wrote in a note to clients on Thursday that using the Sell Side Indicator as a timing tool can be challenging.

“Although a growing chorus of bulls increases the risk of complacency, our data show that sentiment can stay elevated for relatively long stretches before a bull market ends,” Subramanian wrote. “Like today, the SSI was roughly 1 [percentage point] away from “Sell” in February 2021, 10 months before the market peaked. The S&P 500 returned 27% during that time.”

Subramanian added, “The SSI’s current level of 57.0% suggests that the 20%+ annual returns we’ve seen over the past two years are likely behind us, but still points to a relatively healthy price return of 10% over the next 12 months.”

The Consumer Discretionary (XLY) sector was the biggest laggard in the S&P 500 on Thursday, falling more than 1.5% as a 6% drop in Tesla (TSLA) weighed down the sector.

Before the opening bell on Thursday, Tesla said it delivered 495,930 vehicles globally in the fourth quarter, missing analyst estimates of around 510,400 as compiled by Bloomberg.

A potential headwind for US stocks is on the rise.

The US dollar index rose above 109 on Thursday, hitting its highest level since November 2022. Eventually, an increasingly strong US dollar could serve as a headwind for stocks.

One reason is how a stronger US currency impacts companies that do business internationally. If the dollar is stronger, then foreign sales could convert into fewer US dollars, potentially weighing on earnings.

And when taking a look at the companies that drove S&P 500 (^GSPC) earnings growth in the third quarter, many have large international exposure. Data from FactSet shows S&P 500 companies with less than half of their revenue in the US grew earnings by nearly 14% over the year prior during the third quarter. That far outpaced the 1.8% earnings growth seen by companies with more than half of their revenue coming in the US.

Yahoo Finance’s Ben Werschkul reports:

A new debt ceiling was established this week, setting up a debate for the months ahead about averting a government default.

The parameters of that coming standoff are already making Donald Trump unhappy.

The issue for the President-elect is how events are conspiring — thanks to the nudging of both Democrats and far-right Republicans — to make the inevitable move by Trump and his allies to allow new governmental borrowing a messy one.

Read more here.

Mortgage rates continued their trek higher last week, nearly hitting 7%.

Yahoo Finance’s Claire Boston reports:

The average 30-year fixed-rate mortgage rose to 6.91% in the week through Wednesday, from 6.85% as of Dec. 26, according to Freddie Mac data. 15-year mortgage rates jumped to 6.13% from 6% a week earlier.

“Inching up to just shy of 7%, mortgage rates reached their highest point in nearly six months,” Sam Khater, Freddie Mac’s chief economist, said in a statement. “Compared to this time last year, rates are elevated and the market’s affordability headwinds persist.”

It’s the third straight week of rate gains and the highest level since July.

Read more here.

On Thursday, FBI deputy assistant director Christopher Raia said authorities have found no “definitive link” between the Bourbon Street attack in New Orleans on Wednesday, and the explosion of a Tesla (TSLA) Cybertruck filled with fireworks and fuel tanks outside a Trump hotel in Las Vegas.

“At this point, there is no definitive link between the attack here in New Orleans and the one in Las Vegas,” Raia said at a press conference on Thursday morning, adding that the investigations are still in a very early stage.

Earlier on Thursday, CNN reported the suspect believed to be linked to the explosion of a Cybertruck in Las Vegas on Wednesday was a US special forces soldier.

The Cybertruck had been rented on an app called Turo, the same service used to rent the vehicle involved in running over a crowd of people in New Orleans early Wednesday morning.

The Dow Jones Industrial Average (^DJI) erased early morning gains to hover near the flat line by 11:30 a.m. ET on Thursday.

A fall in shares of Boeing (BA) weighed on the blue-chip index. The industrial giant’s stock dropped as much as 3.5% following Sunday’s deadly crash of a 737-800 aircraft operated by Jeju Air in South Korea. Analysts were however quick to point out it’s unlikely that the incident was related to Boeing’s production challenges last year.

Apple (AAPL) shares fell to session lows after the iPhone maker offered rare discounts on its latest devices in China.

A man alleged to be linked to the explosion of a Tesla (TSLA) Cybertruck filled with fireworks and gasoline in Las Vegas was a US soldier, according to a report from CNN.

“The man connected to the rental of the Tesla Cybertruck that exploded outside of the Trump Hotel in Las Vegas on Wednesday is a US Special Forces soldier assigned to 10th Special Forces Group, per 4 US officials,” CNN correspondent Natasha Bertrand wrote on X.

“The man is a US Army special forces operations sergeant, holding the rank of master sergeant, a senior enlisted rank, the officials said. Three officials said he was on active duty and was on leave from Germany, where he was serving with 10th Group, at the time of the incident,” said the posting.

The Cybertruck had been rented on an app called Turo, the same service used to rent the vehicle involved in running over a crowd of people in New Orleans early Wednesday morning. Authorities are investigating whether there is any link between the two incidents.

Tesla shares slid almost 6% on Thursday morning after the EV giant posted its first annual delivery decline. The stock is down roughly 18% over the past five trading sessions.

Shares of Tesla hit all-time highs in mid-December on the heels of a massive rally following Donald Trump’s White House victory in early November.

Shares of Cloudflare (NET) jumped more than 5% on Thursday after the cloud platform company received a double upgrade from Goldman Sachs.

The analysts said they see a 28% upside for the stock and raised their price target to $140. They upgraded the stock to a Buy from a Sell recommendation.

Goldman analysts cited “improving sales and marketing productivity cycle” and “new AI inferencing use cases”

AI chip heavyweight Nvidia (NVDA) rose more than 2% to lead the Nasdaq Composite (^IXIC) higher on Thursday morning.

Other “Magnificent Seven” stocks also helped lift the tech-heavy index, with Meta (META) and Amazon (AMZN) rising almost 2%.

Meanwhile, shares of Tesla (TSLA) pared some of the losses that came after the EV giant posted its first annual decline in deliveries. The stock fell by as much as 6% in early trading.

Apple’s (AAPL) stock also came off session lows. The iPhone maker has offered rare price discounts on its latest models in China, highlighting rising competition from local device makers.

Stocks rose on the first trading day of the new year following a holiday break and a roaring 2024 for the markets.

The S&P 500 (^GSPC) jumped 0.5%, while the Dow Jones Industrial Average (^DJI) rose 0.6%. The tech-heavy Nasdaq Composite (^IXIC) jumped but quickly erased early session gains.

Tesla (TSLA) stock dropped after the electric vehicle giant said it delivered 495,570 vehicles in the fourth quarter of last year, making 2024 the first year of a decline in annual deliveries since 2011, according to Bloomberg data.

Tesla (TSLA) stock dropped 3% in premarket trading after the electric vehicle giant said it delivered 495,570 vehicles in the fourth quarter of 2024, bringing total deliveries to roughly 1.79 million for the whole year.

Wall Street analysts expected the automaker to deliver roughly 512,300 EVs for the last three months of the year, or about 1.8 million vehicles,

In the fourth quarter, Tesla said it produced approximately 459,000 vehicles.

Tesla (TSLA) stock rose more than 1% premarket as investors prepared for the Elon Musk-led electric vehicle maker to release its fourth quarter deliveries Thursday.

Wall Street analysts expect the company to report deliveries of roughly 512,300 EVs for the period, bringing its annual deliveries for the 2024 fiscal year to 1.8 million EVs, according to Bloomberg consensus estimates.

If the average analyst forecast holds true, that would mean Tesla’s annual EV deliveries fell 0.3% from the prior year — making 2024 the first year since 2011 that Tesla EV sales failed to grow, according to Bloomberg data.

Tesla shares fell more than 3% on the last day of 2024 as megacap tech stocks lagged, but the EV company’s stock was still up more than 60% for the year.

Tesla had warned in 2023 that production growth would be “notably lower” in the year ahead, as Pras Subramanian noted in his roundup of Tesla’s biggest news in 2024 (you can read that story here).

Separately, Tesla made headlines after a Cybertruck exploded outside of a Trump hotel in Las Vegas, prompting an investigation of a potential terrorist attack.