Are Tesla stocks falling after a drastic rise and falling car prices a negative sign?

Tesla stock trading in the afternoon1.6% declineIt was 174.70 dollars, but the S&P 500 and Nasdaq overall rose 1% and 1.3%, respectively.

This decline followed Tuesday's 3.3% increase, and the stock's week-to-week rise was 5.4%. With Monday and Tuesday's wins, Tesla recouped about three-fourths of the previous week's losses, when shares fell 7%.

Wednesday's decline was affected by CEO Elon Musk's dismissal of the entire Tesla supercharger team in response to team leader Rebecca Tinucci's opposition to drastic staff cuts. It is said that the company re-hired some of the charging staff that had been temporarily laid off.

Tesla recently announced large-scale headcount cuts amid slowing growth, but Musk maintained his commitment to continue expanding Tesla's charging network.

Also, there is a possibility that inflation statistics will weigh on stock prices. Consumer prices in the US in April rose 3.4% from the previous year, in line with economists' predictions compiled by FactSet. However, new car prices fell for 3 consecutive months, and used car prices fell for 2 consecutive months.

A decline in automobile prices means a decline in the profits of automobile manufacturers. Ford shares fell 1.8% in late trading, and Stellantis shares fell 0.5%. GM shares rose 0.8%.

Despite this, Tesla shares are still up 4% in the week. The new tariffs may help. President Joe Biden announced Tuesday that import tariffs on Chinese cars will be raised from 25% to around 100%.

However, the 25% tariff is already significant, and no Chinese brands are sold in the US.

On Tuesday, NIO shares rose 7%, while XPeng's shares rose 2.4%. Theoretically, the two Chinese electric car manufacturers will be hit by the increase in tariffs.

Polestar Automotive and Lotus Technology sell Chinese-made EVs in the US, and these vehicles are subject to import tariffs. Still, Polestar shares closed down just 1 cent (0.7%). Lotus shares rose 0.5 percent.

The stock prices of US automakers Ford Motor and General Motors, which benefit from enhanced tariff protection, rose 0.9% and fell 0.3%, respectively.

The direct impact of the tariff announcement is difficult to guess. That seems to have caused some trade volatility.

As of Wednesday, Tesla shares have fallen 29% since the beginning of the year.