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Thursday, October 22, 2026
What’s happening: Shares of Tesla fell in after-hours trading on Wednesday following the release of its third-quarter results.
What happened: The electric vehicle maker reported better-than-expected revenues and earnings for the latest quarter.
A decline in Tesla’s core automotive profitability and plans to merge with SpaceX exerted pressure on the stock.
How were the results: The company’s revenue came in flat versus the year-ago quarter amid lower vehicle ASP (average selling prices) and a decline in deliveries.
Why it matters: Tesla reported positive cash flows and gross margins for the third quarter. The company generated free cash flow of $1.53 billion, much better than market estimates of a cash burn of $4.92 billion. Automotive gross margins, excluding regulatory credits, stood at 18.1% for the quarter, above market expectations of 16.7%.
Automotive revenue fell 3% year-over-year to $20.56 billion in the quarter. The company previously reported deliveries of 486,532 for the third quarter, representing a 2% year-over-year decline. Although the company saw a decline in deliveries, it reached record deliveries in certain regions, like Canada, Japan, Australia and Taiwan.
The company closed the latest quarter with the highest backlog for passenger vehicles in four years, while the energy storage business also recorded its strongest-ever order rate and backlog during the third quarter.
The company started volume production of Tesla Semi in the quarter, while it began Optimus production on high-volume lines at the Fremont factory.
CEO Elon Musk said on Tuesday that it would be a “good idea” to merge Tesla and SpaceX, while the companies had formed special committees to hold discussions on the deal.
Tesla projected 2026 capex of around $20 billion, lower than its previous outlook of more than $25 billion. The company spent $4.7 billion in capex during the third quarter, double that in the year-ago quarter, but lower than market estimates of $7.5 billion.
How shares responded: Tesla’s stock fell 3.3% to $373.65 in the after-hours trading session following the release of quarterly results. The company’s shares are down around 12% year to date.
What to watch: Investors will keep an eye on the company’s deliveries and comments from Musk regarding the Tesla and SpaceX merger.
Context: The GBP/USD forex pair retreated this morning, after hitting a one-month high in the previous session.
Details: Data released on Wednesday showed that UK’s annual inflation rate accelerated to 3.5% in September, from 3.1% in the previous month. This marked the highest inflation rate since October 2025 and was higher than market estimates of 3.4%.
UK’s producer inflation surged 4.6% year-over-year in September, accelerating from August’s 3.8% gain and coming in higher than market expectations of 4.3%. This marked the fastest pace since April 2023.
The retail price index also climbed 3.9% year-over-year in September, accelerating from the previous month’s 3.4% growth.
UK’s public sector net borrowing, excluding public sector banks, came in at £24.5 billion in September, higher than £22.8 billion in the year-ago month and market estimates of £23.9 billion.
The GBP/USD forex pair had surged to its highest level in a month on Wednesday, as hotter-than-expected inflation data reinforced speculations of the Bank of England hiking its benchmark interest rates next month.
Markets are now fully pricing in a 25bps rate hike in November. The Bank of England is the only major central bank to have held back so far from a tightening its monetary policy.
Weakness in the US dollar lent some support to the GBP/USD forex pair. The US dollar index, which measures the greenback’s performance versus a basket of major peers, fell around 0.1% to 101.72 this morning.
The GBP/USD forex pair slipped around 0.1% to 1.3386 this morning after touching a one-month high in the previous session.
What to watch: Data on UK’s CBI business optimism index (1400 UAE Time) will be released today. Business confidence in the UK, which rose to -36 points in the third quarter from -65 points in the previous quarter, is expected to decline to -38 points in the fourth quarter.
Investors also await the release of data on retail sales and S&P Global composite PMI from the UK on Friday. UK’s retail sales, which grew 2.4% year-over-year in August, following a revised 1.2% gain in the previous month, are expected to rise by 1% in September. Analysts expect the S&P Global UK composite PMI to decline to 51.8 in October from 52.0 in September.
Other Markets: US trading indices closed higher on Wednesday, with the Dow Jones index, S&P 500 and Nasdaq 100 up by 0.69%, 0.58% and 1.13%, respectively.
Russia’s President Vladimir Putin agreed to resume trilateral peace talks with the US and Ukraine to end the ongoing war. The news sent the USD/RUB forex pair lower in forex trading this morning.
New Zealand’s annual inflation rate eased to 3.7% in the third quarter from 4.1% in the previous quarter. The latest reading coming in below market estimates of 3.8% lent support to the NZD/USD forex pair.
India’s infrastructure output jumped 7.9% year-over-year in September, accelerating from 5.9% growth in the previous month. This being the strongest pace of growth in infrastructure output since November 2023 sent the USD/INR pair lower in forex trading this morning.
China’s urban youth unemployment rate slowed to 18% in September from 18.9% in the previous month, which exerted pressure on the USD/CNY forex pair.
US crude inventories contracted by 3.061 million barrels in the week ended October 16, above market estimates of a drawdown of 0.8 million barrels, which sent the WTI crude oil price higher this morning.
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