Tesla’s $1T Musk pay package sparks stock rally amid global market turbulence
Tesla shareholders indeed approved a $1 trillion compensation package for CEO Elon Musk, pushing the company's stock up 1.6% in extended trading. Meanwhile, US equity benchmarks dropped for the second time in three sessions, with AI-related stocks tumbling and job cuts surging, particularly in the technology and warehousing sectors.
The MSCI Asia Pacific Index slipped 0.6%, led by declines in Japan, following the drop in US equities. Asian markets fell due to concerns over AI valuations and signs of a cooling labor market. This comes after US companies announced 153,074 job cuts last month, almost triple the number during the same period last year. Notably, Amazon announced about 14,000 job cuts, UPS planned a reduction of up to 48,000 jobs, and Deutsche Bahn planned to cut 30,000 jobs. These cuts, driven by cost reduction, restructuring, and technology investments, affected office work, logistics, and public transport industries.
Markets were volatile due to comments from Federal Reserve officials on interest rates, with many focusing on inflation. Wall Street chief executives have also struck a more cautious tone over a narrowing group of stocks driving the market's gains. The MSCI All Country World Index is on track for its first weekly decline in four, as investors question whether massive capital spending will pay off. Treasury 10-year yields had their biggest drop in a month in the previous session after data showed the steepest October job cuts in more than two decades.
Despite Tesla's stock surge, US and Asian markets experienced a turbulent week, marked by job cuts and market uncertainty. Investors are closely watching AI valuations, labor market trends, and Fed policy, as the MSCI All Country World Index heads for its first weekly decline in four.
