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Elon Musk’s companies, X (formerly Twitter), Starlink, and Tesla, are causing ripples across Wall Street, sparking uncertainty and market volatility. The recent regulatory blockades in Brazil, where X refused to remove far-right-linked profiles, have intensified tensions, affecting Starlink's satellite services as well. X now faces fines exceeding $1.5 million from the Brazilian government, with more expected. Starlink, which provides crucial internet services, is also under scrutiny, impacting its operations and customer reach in the region.
Simultaneously, Tesla, a cornerstone in the tech stock market, remains under pressure due to Musk’s legal and regulatory challenges across multiple fronts. Tesla's stock has dropped over 30% since its November 2021 peak, falling from $272 to $183 in July 2024. Investors remain wary as the company's RSI hit a "strong sell" signal, creating a downward trend. Recent data shows Tesla has lost over 15% market share in EV sales to competitors like BYD and Rivian, amplifying fears of declining dominance.
Broader economic concerns also compound these issues. The U.S. Federal Reserve is closely watched as it prepares a potential 25 basis point rate hike, aiming to temper inflation but also risking further market instability. The Bank of Canada’s third consecutive rate cut signals mixed signals in the North American economy, with growth flatlining. Meanwhile, oil prices face downward pressure as Brent and WTI post monthly losses, and OPEC+ considers supply increases in October.
As China's manufacturing PMI data shows the worst contraction in six months, global economic uncertainty heightens. Musk’s companies, facing political and regulatory storms, could further aggravate this market volatility. Investors are bracing for possible further corrections in Tesla’s stock price, with analysts eyeing potential drops to $138.88 or even $101 if bearish patterns continue.
