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Nasdaq 100 Pares Gains During Volatile Fed Day, Tesla Falls on Earnings

Nasdaq 100 Pares Gains During Volatile Fed Day, Tesla Falls on Earnings

Brendan Fagan, Contributor


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Nasdaq 100, Federal Reserve, Treasury Yields, Tesla Earnings – Talking Points

  • Nasdaq 100 erases gains of roughly 3.5% during volatile Fed session
  • Tesla beats on revenue and earnings estimates, shares down almost 5% after-hours
  • Fed Chair Jerome Powell comes out aggressive on rate hikes and policy normalization
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The Nasdaq 100 erased strong gains late-Wednesday as Treasury yields soared on the back of Fed Chair Jerome Powell’s press conference. The tech-heavy index gave back gains of nearly 3.5% to finish the session flat. Sentiment following the opening bell was strong, with Microsoft retracing its after-hours decline from yesterday. Volatility continues to reign supreme on Wall Street, as markets continue to digest evolving Fed policy and geopolitical tensions.

The session pivoted on the Powell press conference, after indices spiked to session highs following the release of the updated policy statement. Chair Powell hinted that the FOMC (Federal Open Markets Committee) could be more aggressive in tightening policy, which sent U.S. Treasury Yields higher. Powell stated that FOMC members felt an increase to the Fed Funds rate would be appropriate soon, while also indicating that every meeting this year could be a “live meeting.”

Nasdaq 100 Futures (NQ) 30 Minute Chart

Chart created with TradingView

Price briefly spiked above 14,600 around 2 PM EST following the release of the policy statement, which invited a swarm of buyers on the premise of a potentially more dovish Fed. The tone of Chair Powell’s press conference saw the October lows give way yet again, inviting a wave of selling which took the index into negative territory for the day. Price was able to hold the key 14,000 level, offering some respite for beleaguered bulls. Rising Treasury yields could continue to weigh on the Nasdaq 100 Index, as valuation and the principle of price discovery slowly creeps back into the market while the Fed begins to withdraw liquidity.

US Treasury Yields (Maturities > 1 Year)

Courtesy of TradingView

Following the closing bell in New York, Tesla reported results for Q4 which beat analyst expectations on both the top and bottom lines. Despite the beat, Tesla shares sold off almost 5%, briefly falling below $900. Revenue was up 65% year over year (YoY), while automotive revenue rose 71% YoY. Management cited supply chain issues as a limiting factor for quarterly performance, indicating in a statement that “factories have been running below capacity for several quarters.” Market participants and followers of CEO Elon Musk may eagerly await any updates on the Cybertruck, which has notably suffered from delays.

Tesla Q4 Earnings:

Revenues: $17.72B vs. $16.57B est.

EPS: $2.54 vs. $2.36 est.

Tesla 5 Minute Chart

Chart created with TradingView

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--- Written by Brendan Fagan, Intern

To contact Brendan, use the comments section below or @BrendanFaganFX on Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.