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Why TuSimple Stock Is Lower Today

By John Rosevear – Jan 10, 2022 at 9:16AM

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Investors are worried about rising interest rates, but there was also some actual news.

What happened

Shares of TuSimple Holdings (TSP -4.17%) were trading lower on Monday afternoon amid a broad-based sell-off driven by concerns about rising interest rates.

As of 1:45 p.m. ET, TuSimple's shares were down about 10.3% from Friday's closing price.

So what

TuSimple is a San Diego-based company that is working to develop and deploy autonomous heavy trucks. There was no news moving the company's stock lower on Monday; rather, it appeared to be caught in a broad sell-off of technology names triggered by concerns about inflation and interest rates. A jump in the benchmark 10-Year U.S. Treasury rate, from 1.769% on Friday to 1.8% early on Monday, seems to have alarmed investors.

Several white semi trucks in a garage.

TuSimple is working to develop a Level 4 self-driving system for heavy trucks. Image source: TuSimple Holdings.

Traders may also be nervous about a key consumer-price report due on Wednesday. If, as expected, the report shows that inflation has remained high, that will likely increase the chances of a Federal Reserve rate hike in March. Higher interest rates, which naturally increase the costs of financing, tend to be bearish for stocks in many sectors.

That's why the 10-year rate jumped over the weekend, and it's -- indirectly -- why TuSimple's shares were down sharply today.

Now what

TuSimple had some minor positive news last week. The company said that it has expanded its existing relationship with chip giant Nvidia (NVDA 1.48%) to design and develop custom silicon for its upcoming Level 4 self-driving truck system. TuSimple said that the collaboration will accelerate its development timeline and its ability to roll out self-driving heavy trucks at scale.

Investors can expect TuSimple to report its fourth-quarter and full-year financial results in February.

John Rosevear has no position in any of the stocks mentioned. The Motley Fool owns and recommends Nvidia. The Motley Fool has a disclosure policy.

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