Tesla drops as much as 13%, turns negative for the year

Tesla suffered steep losses at the opening bell on Tuesday as investors rotated out of high-flying tech names, although throughout the session Tesla, in addition to Big Tech, clawed back the majority of the day’s early losses.

Shares of the electric vehicle maker dipped as much as 13% — the stock’s worst day since September — before bouncing back from the low. At 3:15 p.m. on Wall Street, shares were down less than 2%.

Tesla shed 8.55% on Monday. With Tuesday’s losses, Tesla turned negative for 2021.

The car maker is the poster child for disruptive tech stocks, which investors favored in the depths of the pandemic. However, the prospects of new stimulus measures and a widescale vaccine rollout have recently made beaten-down and cyclical sectors more attractive to investors.

Tesla is on track for its third straight week of losses. The stock also broke below its 50-day moving average for the first time since November. Moving averages are technical indicators used to determine momentum.

The company is also now exposed to the swings in bitcoin prices after buying $1.5 billion of the cryptocurrency. Bitcoin has dropped 10% in the last 24 hours to break below $50,000 on Tuesday, according to data from Coin Metrics.

Tesla finished 2020 as one of the top-performing stocks of the year. That momentum carried into 2021, with the stock hitting an all-time high on Jan. 25. However, since that high, the stock has tumbled 28%.

The company is not the only tech name that’s experienced selling pressure in recent sessions.

On Monday, the tech-heavy Nasdaq Composite dropped 2.5% as Apple, Amazon and Microsoft fell more than 2%. The Nasdaq added to those losses on Tuesday, dropping 1.7%.

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