Recent political initiatives by Elon Musk have led to a significant drop in Tesla's stock, raising concerns among investors.
Decline in Tesla Stock and Its Reasons
Tesla shares fell by 6.9% on Monday, wiping out over $68 billion from the market cap. This decline followed Musk's announcement of plans to create a new political party, negatively impacting investor confidence.
Market Reaction to Musk's Political Plans
Musk stated that the goal of the new party is to influence the political landscape in the U.S. by flipping '2 or 3 Senate seats and 8 to 10 House districts'. However, traders did not share his optimism, resulting in a decline in Tesla stocks.
Overall State of the Stock Market
U.S. equities also took a hit, with the Dow Jones dropping by 400 points, the S&P 500 losing 0.8%, and the Nasdaq Composite shedding 0.9%. This overall decline came in response to recent tariff announcements by the Trump administration.
Musk's recent political moves are adversely affecting Tesla’s stock, while the overall stock market is experiencing a challenging phase.
