Elon Musk’s SpaceX-Tesla merger math doesn’t add up
In this news:
Key takeaways
- Stock markets worldwide sold off as rising conflict in the Middle East pushed oil prices to $112 per barrel.
- Tesla shares fell 5.35% in after-hours trading after the company cut its 2026 capex guidance.
- Bitcoin declined to $81,922 amid the broader market downturn.
Markets sell off worldwide as further conflict looms in the Middle East
The mood in the markets turned sharply negative today as traders sold off stock around the world. S&P 500 futures were down more than 1% before the New York open. Futures in the tech-heavy Nasdaq fell even more, down 1.82%. Asia and Europe were both largely down.
A number of familiar factors appear to be driving the selling. The Iran-backed Houthis conducted further drone strikes on Saudi airports and the Saudi Aramco Shaybah oil field. The U.S. ordered its staff to vacate the U.S. embassy in Riyadh. Iran continued its campaign of striking ships trying to use the Strait of Hormuz, with four droned in the last 24 hours. Washington and Israel are reportedly planning to restart major combat operations against Iran after the midterm elections in America. Unsurprisingly, the price of oil rose to $112 per barrel.
High oil prices are bad for Asia, which imports most of its fuel. On top of that, the supply of oil to China from Iran’s “shadow fleet,” which had been at sea prior to the blockade of the Hormuz, has finally been exhausted, the Wall Street Journal reported. China’s CSI 300 index declined 1.84%, down 15% year to date.
Tesla fell by 5.35% in after-hours trading following its Q3 earnings call. The company cut its 2026 capex guidance from $25 billion to $20 billion. “So that raised questions about the speed of its transition into AI and robotics, while current revenue and earnings were close to expectations,” Deutsche Bank’s Jim Reid noted this morning.
Finally, the yield on French 10-year bonds hit 5.1%—a level they haven't seen since 2002—signaling that traders don't yet believe that France has put its fiscal crisis behind it.
S&P 500 futures were down 1.02% this morning. The index rose 0.58% yesterday. In Europe, the Stoxx 600 fell 0.92% in early trading, and the U.K.’s FTSE 100 fell by 0.46% before lunch. Asia: South Korea’s KOSPI was down 3.52%. Japan’s Nikkei 225 was down 2.65%. India’s Nifty 50 was down 0.82%. China’s CSI 300 was down 1.84%, and is now down 15% year to date—clearly in correction territory. Brent crude rose to $112 per barrel. Bitcoin declined to $81,922.
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