Nasdaq 100: Tesla Falls 3.7% as Tech Slides on Bessent’s Tax Cut Warning

Tech Sell-Off and Fed Comments Drive Mixed Mid-Session Market Performance

U.S. stock indexes were mixed by midday Thursday, with early gains reversing as market sentiment shifted. Tech stocks led the decline, dragged down by sharp losses in Tesla and Apple. Meanwhile, comments from Treasury secretary nominee Scott Bessent and Federal Reserve governor Christopher Waller influenced market outlooks, sparking further volatility.

At 17:04 GMT, the Dow Jones Industrial Average is trading 43250.75, up 29.20 or +0.07%. The S&P 500 Index is at 5966.83, up 6.92 or +0.12% and the Nasdaq is trading 19464.05, down 47.18 or -0.24%.

What Did Scott Bessent Say About Tax Cuts?

Scott Bessent, President-elect Donald Trump’s Treasury pick, emphasized the critical need to extend the 2017 tax cuts during his Senate testimony. Bessent warned of an economic “sudden stop” if Congress fails to renew the cuts, citing potential tax increases for the middle class and reduced child tax credits.

He also criticized unchecked fiscal spending, pointing to the ballooning U.S. deficit, which reached $710.9 billion in the first three months of fiscal 2025—a 39.4% year-over-year increase. His defense of the U.S. dollar as the global reserve currency added weight to his remarks, with traders watching closely for hints of future fiscal policy.

How Did Fed Governor Waller Impact Rate Cut Expectations?

Federal Reserve governor Christopher Waller signaled potential rate cuts, suggesting that continued progress on inflation could prompt the central bank to ease policy sooner than markets anticipate. His remarks pushed Fed funds futures traders to price in a near 50% probability of a rate cut by May, according to CME’s FedWatch Tool. Treasury yields eased slightly following Waller’s comments, with the 10-year yield pulling back to 4.623%.

Why Are Tech Stocks Leading the Sell-Off?

Tech stocks, particularly Tesla and Apple, weighed heavily on market performance. Tesla dropped 3.7%, while Apple fell 3.1%, dragging the Roundhill Magnificent Seven ETF down 0.9%. Meta Platforms, Alphabet, and Nvidia also posted losses, offsetting modest gains in Amazon and Microsoft. These stocks’ outsized influence on the S&P 500 contributed to its choppy performance, with the index clinging to a narrow 0.02% gain by late morning.

What Should Traders Watch Next?

Investors will closely monitor further testimony from Bessent for clarity on fiscal and tax policies under the incoming administration. Additionally, market participants will track inflation data and its potential to shape the Fed’s rate path. With tech stocks under pressure and mixed signals from policymakers, volatility may remain elevated as traders reassess growth and risk outlooks.

Looking ahead, Friday’s earnings reports and upcoming economic data could provide additional catalysts for market direction.

More Information in our Economic Calendar.