Tesla faces declining sales, contracting margins, and brand damage, with increased competition eroding its market share in Europe and California.

"Tesla is crossing the chasm to autonomy while absorbing slower volume, EV incentive elimination, tariffs and investing in new initiatives that may not make margins for years," Morgan Stanley analyst Adam Jonas, a longtime Tesla bull, wrote early Thursday.

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Investors held onto hopes that the U.S. and Japan’s trade agreement could lead to a tariff breakthrough with other countries, and pushed the S&P 500 and Nasdaq Composite to fresh record highs.

Investors knew electric vehicle (EV) sales have been slumping for Tesla ( TSLA -8.44%). The EV leader announced a 13.5% year-over-year drop in second-quarter deliveries on July 2. Yet the stock is tanking today after Tesla reported its full second-quarter financial update today.

Tesla is scheduled to report its second-quarter results after the market closes on Wednesday, with investors expecting the electric vehicle maker's stock could make a sizable move.

US stock market today saw mixed action as the Dow Jones dropped while the S&P 500 and Nasdaq inched higher, driven by strong Alphabet earnings and cautious outlook from Tesla. Alphabet jumped over 3% after boosting its AI investment,

Tesla's market cap fell below $1 trillion, but it still reflects investors' assumptions of enormous future growth.

The Dow Jones index rose after surprise economic data. Tesla stock rallied on new plans to launch its robotaxi service.

At the risk of sounding like investing guru Cathie Wood, Tesla (NASDAQ:TSLA) has a clear path to be a $20 trillion stock. The pioneer in electric vehicles (EVs) and sustainable energy has transformed the automotive industry since its founding 22 years ago,

Tesla, Inc. (TSLA) is a leading American electric vehicle (EV) and clean energy company headquartered in Austin, Texas. Valued at $940.6 billion by market cap, Tesla designs, manufactures, and sells electric cars,