Futures tick lower, Tesla shares slump, Bitcoin rises - what's moving markets

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Futures tick lower, Tesla shares slump, Bitcoin rises - what's moving markets

Investing.com -- U.S. stock futures point lower, with labor market data and comments from the top Federal Reserve policymaker looming later in the week. Tesla (NASDAQ: TSLA ) shares slump in after hours trading on falling deliveries of its China-made vehicles, while the price of Bitcoin rises to within touching distance of an all-time high.

1. Futures lower

U.S. stock futures dipped on Tuesday, as investors geared up for key economic data and testimony from Federal Reserve Chair Jerome Powell later in the week.

By 03:16 ET (08:16 GMT), the Dow futures contract had shed 67 points or 0.2%, S&P 500 futures had fallen by 11 points or 0.2%, and Nasdaq 100 futures had shed 81 points or 0.4%.

The main averages closed lower following choppy trading on Monday. The benchmark S&P 500 briefly touched intraday record highs thanks in part to a jump in chip stocks fueled by hype around the products that underpin artificial intelligence, although this momentum faded heading into the end of the session.

Traders are gearing up for the release of the February nonfarm payrolls report on Friday, which could provide some insight into the health of the U.S. labor market. The reading may also factor into how Fed officials approach potential interest rate reductions this year.

Powell, meanwhile, will testify to lawmakers on Wednesday and Thursday.

2. Target to report

Big-box retailer Target (NYSE: TGT ) is slated to report its latest quarterly results on Tuesday that could give markets an updated glimpse into the state of U.S. consumers.

Figures from rival Walmart (NYSE: WMT ) suggested that shoppers, conscious of both high inflation and elevated interest rates, are choosing to forego larger purchases in favor of essential items.

While Walmart's focus on low-price groceries has bolstered its operations against the cooling in customer spending, Target has been hit by patrons pulling back expenditures on its home goods, electronics and apparel. The Minneapolis-based company flagged in November that although this slowdown appears to be ebbing, headwinds like increased borrowing costs and student loan repayments may maintain the pressure.

In response, Target said it would roll out cheaper toys and decorations during the holiday season, as well as discounts on some jewelry and kitchenware.

3. Tesla shares slump on weak shipments from Chinese factory

Shares in Tesla tumbled by more than 7% in extended hours trading after the electric vehicle (EV) giant said shipments of its China-made cars dropped to a 14-month low in February.

Tesla announced a 19% year-on-year decline in deliveries of EVs made at its plant in Shanghai to 60,365, the lowest level since December 2022, likely due to disruptions caused by the Lunar New Year holidays.

The drop came as the firm engaged in a bitter price war with its Chinese peers to capture the world’s largest EV market. Last week, Tesla introduced just under $5,000 worth of new incentives in a bid to entice Chinese customers to buy its Model Y and Model 3 cars.

Weakening demand also brings up the prospect of more price cuts in the country -- a trend that bodes poorly for all EV players in China, given that it has eaten into profit margins.

Shares in Chinese EV players like BYD (HK: 1211 ), Nio (HK: 9866 ), Xpeng (NYSE: XPEV ) (HK: 9868 ) and Li Auto (NASDAQ: LI ) Inc (HK: 2015 ) all slid in Hong Kong trade, dragging down the broader Hang Seng index .

4. Bitcoin briefly clears $68,000

The price of Bitcoin temporarily cleared key levels in Asian trade on Tuesday, lifting the token up to just under $1,000 shy of a record high hit during the peak of a bull run in 2021.

The world’s largest cryptocurrency had risen by 1.8% to $66,487 by 03:17 ET. Hours earlier it had surged by as much as 8.4% to an over two-year high of $68,450.9 -- within spitting distance of an all-time high of $68,999 reached in late-2021.

Gains in Bitcoin were driven chiefly by steady capital inflows into the digital asset, especially after the approval of several U.S. exchange-traded funds that directly track the token’s price. Its correlation with technology stocks also played into recent gains. Meanwhile, markets awaited an upcoming halving in the rate at which new Bitcoin is generated, an event that is expected to tighten markets.

Data from digital asset manager CoinShares showed Bitcoin-linked investment products saw a fifth straight week of capital inflows in the week to March 4, a total of $1.7 billion. While short positions on Bitcoin increased, U.S.-listed ETFs linked to it, particularly the iShares Bitcoin Trust (NASDAQ: IBIT )) and the Fidelity Wise Origin Bitcoin Fund (NYSE: FBTC ), commanded the lion’s share of inflows.

5. Oil prices dip

Oil prices moved down in European trade on Tuesday, nursing some losses from the prior session and seeing little support as top importer China presented a middling economic growth forecast for 2024.

China set a gross domestic product (GDP) target of 5% this year. The goal and other economic proposals were unveiled in an official report released during the annual National People’s Congress.

While Beijing outlined more economic changes to help shore up growth, the government’s messaging was largely unchanged from its prior signals, providing little to brighten investors' view of what has largely been a sluggish economic rebound in China.

Speculation over an Israel-Hamas ceasefire and fears of worsening demand also remained in play, largely offsetting a tighter outlook for supply. While prices had initially taken some support from the Organization of the Petroleum Exporting Countries and its allies extending its current run of production cuts, this trend has appeared to have lost some steam.

Brent oil futures expiring in May had dropped by 0.4% to $82.49 a barrel, while West Texas Intermediate crude futures fell 0.5% to $77.78 per barrel by 03:18 ET.

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