S&P 500 Drops 0.8% As Tesla Falls To New Lows

Key Insights

• S&P 500 is under strong pressure amid a broad sell-off in energy and tech stocks. 
• Tesla is testing new lows as Q4 deliveries missed analyst estimates. 
• A move below the 3800 level will push S&P 500 towards the support at 3780.

The Sell-Off Is Led By Tesla, Apple, And Energy Stocks

S&P 500 found itself under significant pressure in the first trading session of the year. The tech-heavy NASDAQ Composite was down by more than 1%.

The pullback was led by energy stocks as traders reacted to the sell-offs in the oil and natural gas markets. APA Corporation, EQT Corporation, and Coterra Energy were among the biggest losers in the S&P 500.

The worst-performing stock in the S&P 500 today was Tesla, which moved to new lows after the release of the disappointing Q4 deliveries report. Tesla stock is down by almost 15% in today’s trading session.

Apple  was also among the biggest losers. The stock declined by 4% as reports indicated that it cut orders for Apple Watch, MacBook, and AirPod. NVIDIA, which is down by 2.5%, led the pullback in semiconductor stocks.

From a big picture point of view, investors are not ready to increase risks at the start of the year. Today’s Manufacturing PMI report, which showed that Manufacturing PMI declined for the third month in a row, highlighted recession risks. Traditional safe-haven assets like the U.S. dollar, gold, and Treasuries gained upside momentum today.

S&P 500 Tests Support At 3800

S&P 500 is currently trying to settle below the support level at 3800. In case S&P 500 manages to settle below this level, it will move towards the next support level at 3780. A successful test of the support at 3780 will push S&P 500 towards the support at 3760. If S&P 500 declines below 3760, it will head towards the next support at 3745.

On the upside, the nearest resistance level for S&P 500 is located at 3815. A move above this level will open the way to the test of the resistance at 3840. If S&P 500 gets above 3840, it will head towards the next resistance level at 3860.

For a look at all of today’s economic events, check out our economic calendar.