Tesla shares fall amid inflation data and rate concerns

Tesla Inc. shares dropped 2.8% in morning trading on Thursday as inflation data and regulatory concerns weighed on the electric vehicle maker.

The decline followed a higher-than-expected Consumer Price Index inflation report released before the market opened. The data raised concerns about potential additional tightening from the Federal Reserve, which pushed bond yields higher and affected growth stocks across the technology and electric vehicle sectors.

Tesla trades at a valuation near 340 times earnings, making it particularly sensitive to changes in interest rate expectations.

Barclays analyst Dan Levy maintained a Hold rating and $370 price target on Tesla on Thursday, providing no new positive catalyst for the stock.

A National Highway Traffic Safety Administration safety probe into Tesla's robotaxi fleet and Cybercab vehicles in school zones continues. The investigation affects the autonomous driving narrative that supports a portion of the company's valuation.

Tesla plans to hold a Roadster livestream event this evening. CEO Elon Musk described the event as potentially the greatest product demonstration ever. The event created uncertainty among investors during market hours as they await details on the vehicle, which has faced years of delays.

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