Tesla Shares Plunge Following Weak Earnings

Tesla shares fell 13.5 percent on Thursday, marking one of the largest single-day declines in the company's history. The drop follows second-quarter earnings results that revealed a significant shortfall in profitability, with the automaker reporting 31 cents per share against analyst expectations of 51 cents.

The selloff is driven by investor concern over Tesla's aggressive capital expenditure on artificial intelligence and robotics, which resulted in negative free cash flow of 1.1 billion dollars for the quarter. This spending shift, coupled with the slow rollout of the company's Robotaxi and Optimus humanoid robot projects, has eroded market confidence. The company has now lost approximately 27 percent of its market value year-to-date.

The decline in Tesla's valuation contributed to a broader market downturn, as investors reacted to disappointing earnings from major technology firms. The Nasdaq fell more than 2 percent, while the S&P 500 and Dow Jones Industrial Average both declined by over 1 percent. Rising bond yields and inflationary pressures further exacerbated the negative sentiment, pushing the CBOE Volatility Index to 19.64, its highest level in nearly a month.