TSLA : Fall on Thu (03 Apr) & Fri (04 Apr) ?
On Wed, 02 Apr 2025, US market managed to defy the trend and rose marginally, thanks to a surprising ADP employment report for March 2025. (see below)
US ADP Employment.
The March 2025 report, showed private sector employment growth of 155,000 jobs, exceeding market expectations of 118,000.
This is a significant rebound from February’s upwardly revised of 84,000 jobs.
Wage growth for job stayers rose by +4.6% YoY, while job changers saw a modest +6.5% increase, the lowest premium for switching jobs in over 3 years.
Despite the better-than-expected report, US market was too “pre-occupied” with impending Trump’s tariffs and showed little interest; resulting in the 3 composite indexes trending lower at start of trading day. (see below)
It rebounded twice on Wednesday - at 2:30 pm & 3:00 pm as investors made last-minute bets to position themselves ahead of Trump's tariff announcements.
US stock indexes finished higher after a choppy trading session:
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DJIA : +0.56% (+235.36 to 42,225.32).
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S&P 500: +0.67% (+37.90 to 5,670.97).
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Nasdaq: +0.87% (+151.15 to 17,601.05).
Trump began speaking after Wall Street closed, that was a “tactical” thing to do - delaying US market’s “fall” from Wednesday to Thursday.
Trump’s Tariffs Details.
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Baseline Rate: 10% tariff on all imports to US, affecting over 180 countries/territories.
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With effect from: 05 Apr 2025.
Sample countries with 10% tariffs
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Key Targeted Rates: variable reciprocal tariffs’ rates on roughly 60 of the "worst offenders".
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With effect from : 09 Apr 2025.
In a “surprise” turn of event, Trump did not further levy additional reciprocal tax on Mexico and Canada, unlike China that is (now) slapped with the highest tariff rate of 54%. (see above)
Lastly, there will be a flat rate of 25% tariffs on car imports that has been activated with immediate effect.
Post Tariffs Announcement.
It does not require too much imagination to guess how market reacts to the tariffs’ news.
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Equities:
S&P 500 futures fell -3% to -3.9%; Nasdaq futures dropped -4% to –4.7%, signaling a tech selloff.
Dow futures plunged -2.7%.
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Forex: U.S. dollar weakened 1% against the euro and other major currencies.
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Commodities: Gold prices held near all-time highs as investors sought safety.
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Volatility: Wall Street’s "fear gauge" ( $Cboe Volatility Index(VIX)$) spiked, reflecting heightened uncertainty (see below)
My viewpoints: (mine only)
US market is poised to have a “crash” opening on Thu, 03 Apr 2025 morning.
Future indexes are slated to open -2.94%, -3.67% & -4.39% x% lower for The Dow, S&P 500 and Nasdaq respectively. (see below)
Apart from a crashing US market that is guaranteed, it is the longer term concerns that are more pressing.
This include:
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Inflation risks from higher import costs and disrupted supply chains.
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Potential retaliatory tariffs from trading partners (EU, China, Japan).
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Federal Reserve policy uncertainty amid stagflation fears.
US Market on Friday.
I believe US market will continue to fall on Fri, 04 Apr 2025.
This is because the much-watched US Non Farm payroll for March 2025 will be released.
Based on estimates, it is not a pretty sight. (see below)
Forecast for US Nonfarm Payrolls (NFP) – March 2025
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Consensus Estimate: The market expects an increase of 128,000 jobs, down by -15.13% from February's 151,000.
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Alternative Predictions: There were even some “drastic” models project as low as 80,000 jobs due to economic headwinds, including tariffs and slowing consumer demand.
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Unemployment Rate: Expected to remain steady at 4.1%.
Surprise Event of the Day.
Amidst all the doom and gloom on Wednesday, today and tomorrow - there was a surprise turn of event about $Tesla Motors(TSLA)$.
In 2 previous posts, I have shared analysts’ weak assessment of Tesla and why it could fall further from its 17 Dec 2024’s peak of $479.86 per share.
The hit should come with Tesla’s release of its Q1 2025 delivery data. (see below)
Tesla’s Q1 Key numbers:
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Total deliveries : 336,681 EVs.
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Total production : 362,615 EVs.
This is a -13% YoY decline, two days after the electric vehicle company’s stock wrapped up its worst quarter since 2022.
Yet in a surprise turn of event, instead of closing lower, Tesla’s shares closed up more than +5% (see above) or $14.30 per share.
It rebounded from a dip after Politico reported that CEO Elon Musk could leave his Department of Government Efficiency position. (see below)
Traders rejoiced at the rumours and drove stock price higher, while both Mr Musk proclaimed that its “fake” news and White House press secretary, Karoline Leavitt, said the Politico story was “garbage”.
Whatever the case maybe, there is no doubt that Tesla will succumb to US tariffs’ aftermath just like other US stocks on Thursday and similarly to dismal US non farm payroll data on Friday.
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Do you think US market will consolidate on both Thursday & Friday ?
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Do you think Tesla will fall on Thursday & Friday or rise against the tide ?
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