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.
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U.S. stocks opened lower after hotter-than-expected inflation.
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.
“If tariffs rise on April 2 as pledged, inflation will accelerate in coming months,” said Bill Adams, chief economist at Comerica Bank.
At the least, some economists said the unexpected rise in core inflation may keep the Fed’s expected rate cuts on hold longer. “Today’s higher-than-expected inflation reading wasn’t exceptionally hot, but it isn’t going to speed up the Fed’s timeline for cutting interest rates, especially given the uncertainty surrounding tariffs,” said Ellen Zentner, chief economic strategist for Morgan Stanley Wealth Management.
Other experts believe the report could keep the Fed from cutting rates at all 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 report, he “expects more Fed members to allude to fewer than two rate cuts or none this year.”
Around 9:35 a.m. ET, the blue-chip Dow fell 0.25%; or 104.59 points, to 42,195.11; the broad S&P 500 dropped 0.25%, or 14.16 points, to 5,679.15; and the tech-heavy Nasdaq lost 0.48%, or 85.79 points, to 17,718.24.The benchmark 10-year yield dipped to 4.303%.
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 12%.
- Customer engagement platform Braze beat analysts’ expectations for the last quarter of 2024. Shares jumped 14%.
- U.S. Steel shares gained 3% 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.
Cryptocurrency
Bitcoin prices slipped in line with stocks amid economic uncertainty over tariffs and the inflation uptick. Bitcoin was last down 2.1% at $85,406.41.
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.
