Tesla’s profit tumbled for a second straight quarter as the electric-vehicle leader continued to feel the impact of slower demand and stiffer competition. The financial results also missed Wall Street expectations on both income and free cash flow, sending the stock down about 8% in after-hours trading. Profitability took a big hit as a result of lower sales and buyers paying less for its core models. Chief Executive Elon Musk partly attributed the lackluster performance to a price war that has broken out within the past year as rivals flood the market with their own EV offerings. “There were quite a few competitor vehicles hitting the market, which haven’t done very well, but they have discounted these vehicles very heavily,” Musk said on a call with analysts. One bright spot for Tesla was a record amount of regulatory credit sales to other carmakers that are failing to meet emissions requirements. Revenue from those credits, essentially pure profit, rose to $890 million in the second quarter, accounting for more than half of its operating income for the period.

After a slightly positive start and a subsequent fall, the Switzerland market rebounded but retreated again to eventually end the session on a weak note on Tuesday. Investors remained a bit cautious and appeared to wait for more data to assess the outlook for U.S. interest rates and economic growth. The benchmark SMI ended lower by 17.92 points or 0.15% at 12,278.82 after scaling a low of 12,244.62 and a high of 12,344.38 intraday. Givaudan dropped 3.86%. Roche GS and Roche Holdings ended lower by 2.43% and 2.24%, respectively. SIG Group drifted down 1.86%. Logitech International ended lower by about 1% despite the company raising its full-year sales and profit outlook. Lindt & Spruengli, Straumann Holding, Nestle and Sandoz Group also closed weak. Kuehne + Nagel climbed 1.86%. ABB and Lonza Group both gained 1.6%. Partners Group, Holcim, Julius Baer, Swiss Re and VAT Group advanced 1 to 1.5%. Richemont climbed nearly 1%. Geberit, Sonovoa, Alcon and Sika ended higher by 0.6 to 1%.

Europe
European stocks closed on a mixed note on Tuesday with investors assessing quarterly earnings updates, and looking ahead to some key economic data from the U.S., including readings on inflation said to be preferred by the Federal Reserve. Investors also continued to assess the political situation in the U.S., where Vice President Kamala Harris looks set to secure the nomination for presidency. The pan European Stoxx 600 edged up 0.13%. Germany's DAX climbed 0.82%, while the U.K.'s FTSE 100 and France's CAC 40 lost 0.38% and 0.31%, respectively. Switzerland;s SMI ended down 0.15%. Among other markets in Europe, Finland, Greece, Iceland, Netherlands, Norway, Poland and Turkiye closed weak. Denmark, Spain and Sweden ended higher, while Austria, Belgium, Portugal and Russia closed flat. In the UK market, Compass Group rallied more than 4.5% after upgrading its full-year profit and revenue guidance. Rolls-Royce Holdings climbed 3.77% and Melrose Industries gained 2.07%. Hikma Pharmaceuticals ended notably lower. The company announced that its unit Hikma Pharmaceuticals USA, Inc. is extending recall of one lot of Acetaminophen Injection, 1000mg/100mL, (10mg/mL) bags to the consumer/user level. In the German market, Sartorius surged 7.7%. SAP gained about 7.15% after adjusted profit for the second quarter came in above expectations. Porsche ended more than 5% down. The luxury car maker cut its full-year revenue forecast and warned of impairments in production spurred by a supply shortage.

United States
Relatively placid stock indexes on Tuesday masked furious paddling beneath the surface of the market. The tech-heavy Nasdaq Composite inched 0.1% lower, while the S&P 500 edged downward by 0.2%. The Dow Jones Industrial Average dropped by 0.1%, or 57 points. Investors have been fixated in recent days on a U.S. presidential election in flux, a market rotation of potentially massive proportions and a technology outage that snarled global travel with the blue screen of death. But Tuesday trained traders’ focus back to basics with a slew of corporate earnings reports. Shares in United Parcel Service skidded 12% - the worst performance in the S&P 500 - following a report of weaker-than-expected revenue and a pared-back outlook. Spotify surged 12% after the audiostreaming company posted its second-consecutive quarterly profit. Down 6.4%, General Motors stock scored its worst daily performance since 2022, with investors concentrating on eroding market share in China rather than strong domestic demand. Major stock indexes on Tuesday seesawed between minor gains and losses as investors parsed the first major blast of corporate earnings reports. Lockheed Martin’s 5.6% gain was its best day of the year after the defense contractor lifted its profit outlook amid conflicts in Ukraine and the Middle East. With strong demand for its commercial engines and services, GE Aerospace shares jumped 5.7%. The truck maker Paccar slumped 11% following earnings that lagged behind Wall Street estimates. But investors were particularly eager for Tesla and Alphabet earnings after the closing bell for hints as to whether a marketwide rotation away from big tech and into smaller firms would continue.

Asia
Stock markets in East Asia and Australia are down on Wednesday - mainly due to the technology sector. There is no trading in Taiwan due to a hurricane, and the markets in the Philippines are also closed as a result. In addition to the ongoing negative impact from China, traders are also pointing to the results of major US technology companies after the US stock market close, some of which failed to meet expectations. While e-car manufacturer Tesla was completely disappointing, Alphabet impressed with convincing business figures but disappointed with its outlook.

Bonds
The topsy-turvy session extended a period of unusual volatility among individual stocks fueled by investor bets on winners and losers from the artificial-intelligence boom and expected interest-rate cuts. On Tuesday, U.S. 10-year Treasury yields held largely steady at 4.240%.

Analysis
Bank of America lowers Swisscom target to CHF 493 (491) – Underperform
HSBC lowers Ryanair target to EUR 12.50 (16.50) – Hold
Barclays lowers About You target to EUR 3.10 (3.60) – Underweight

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