Tesla shares TSLA traded lower on Wednesday even as Germany backed a faster rollout of the company’s Full Self-Driving (FSD) software across the European Union, while a broader EU vote on the technology was pushed back.

German Transport Minister Steffen Bilger said he supports prompt approval of Tesla’s driver-assistance system across the bloc after discussions with the company over technical and liability issues.

“My goal is for Tesla drivers to be able to enjoy the benefits of ‘assisted driving’ throughout the EU without delay,” Bilger said.

Tesla CEO Elon Musk responded to the development on X with “Danke Schön!”, which translates to “Thank you very much.”

TSLA shares were about 0.97% lower at the time of writing and were tracking their first decline in four sessions.

Germany’s position adds to support for Tesla’s FSD technology from several European transportation authorities, including those in the Netherlands, Belgium, Denmark and Croatia.

Speed limits remain a key issue

Tesla’s progress in Europe comes as regulators continue to scrutinize the safety of its driver-assistance technology.

France has questioned whether FSD currently meets its safety requirements.

In July, French Transport Minister Philippe Tabarot raised concerns about speeding, driver attention, and the system’s performance in complicated urban driving conditions.

Sweden has also called for greater scrutiny of FSD’s speed-setting functions and said approval should be supported by sufficient safety analysis.

Despite its name, FSD is not fully autonomous.

The system can control steering, acceleration, braking, and lane changes, but drivers must remain attentive and ready to take control.

Germany’s support also comes with restrictions.

Tesla has agreed to rename the system “Tesla Assisted Driving” in Europe because the term FSD could be considered misleading for a supervised driving system.

Germany also agreed with Tesla that the European version could exceed the posted speed limit by up to 10%.

The US “Mad Max” setting, which can allow the vehicle to exceed the detected speed limit by as much as 50%, will not be available in Europe.

EU decision could come in December

Tesla had been seeking an EU-wide vote in October, but the European Union’s Technical Committee on Motor Vehicles held further discussions on October 6 instead of voting on the technology.

That leaves December as the earliest likely opportunity for a bloc-wide decision.

The development comes ahead of Tesla’s third-quarter earnings report, scheduled for October 21.

Investors are expected to focus on the company’s FSD technology, robotaxi plans and Optimus project.

Goldman Sachs said Tuesday that these businesses could become more important to Tesla’s stock than near-term earnings.

Wall Street is expecting about $27.91 billion in third-quarter revenue and earnings of $0.45 per share, according to Fiscal.ai.

Germany’s support adds to Tesla’s efforts to secure wider regulatory approval for FSD in Europe, while restrictions around speed and driver supervision remain central to the approval process.

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Shares of Skydance Corporation fell 8% Wednesday, extending their decline into a second day after the completion of the company’s $111 billion acquisition of Warner Bros. Discovery.

Skydance began trading on the New York Stock Exchange under the new ticker “SKYD” on Tuesday, replacing the Paramount Skydance listing on the Nasdaq exchange.

The stock fell 2.7% on its first trading day and continued lower Wednesday, hovering around $8.70.

The slide comes as investors assess the financial burden and execution challenges facing the newly combined media company, which is set to drastically alter the US media landscape.

Debt adds to investor concerns

The transaction creates a media group with a broad portfolio that includes Paramount and Warner Bros. movie studios, as well as HBO Max, CBS News and CNN.

While the acquisition gives the company a mammoth collection of media assets, the deal has also raised concerns about its debt load and the cost of integrating the two businesses.

The new entity has more than $80 billion in debt, making its balance sheet a major focus for investors.

Recently, Fitch Ratings and S&P Global Ratings downgraded the company’s long-term credit rating to BB from BB+.

The downgrade could leave Skydance facing higher borrowing costs and greater vulnerability as it works to integrate the businesses and deliver on its financial targets.

Analysts advise caution

Analysts have also expressed concerns about the risks involved in executing the merger.

TD Cowen analyst Doug Creutz maintained a hold rating while advising skepticism. UBS reiterated its sell rating, citing the company’s large debt burden.

The caution contrasts with an upbeat tone from CEO David Ellison, who has emphasized the potential of the combined company while also indicating that cost-cutting measures could affect employees.

“The goal was never simply to add more production capacity, brands or IP. It was to unite the talent, resources and capabilities of these companies into a stronger competitor, one with the scale to take on the biggest players in our industry. Together, we will give these iconic studios the opportunity to win for generations to come,” the company said in a note cited by Variety.

At the same time, the company warned that integrating the two businesses would involve difficult decisions affecting its workforce.

“Integrating two companies will bring change, including difficult decisions that affect our workforce,” the company wrote in the memo.

The comments point to layoffs as one potential avenue for reducing costs as the newly combined company seeks efficiencies.

Scale and savings in focus

Skydance is targeting mid-single-digit growth through 2030 and aims to generate more than $6 billion in annualized cost savings within three years.

The ability to deliver those savings while expanding its streaming operations is going to be key.

UBS analyst John Hodulik said shareholder value would depend on whether management can grow the streaming business faster than the decline in its linear television business.

The company will also seek to leverage the combined libraries and media properties of Paramount and Warner Bros. Discovery, creating a larger content portfolio that could be difficult for competitors to match.

For investors, however, the immediate focus remains on whether Skydance can manage its heavy debt burden, execute the integration, and achieve its stated growth and cost-saving targets.

The skepticism is visible as the shares have so far fallen in both sessions since the Warner Bros. Discovery deal was completed.

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Oil prices fell as the IEA moved to accelerate oil stock releases, while US Treasury yields remained near multi-year highs after a strong 10-year note auction.

Bitcoin declined as leverage amplified a broader crypto selloff, while Micron Technology shares gained after DA Davidson raised its price target on the stock to $3,000.

Oil prices fall as IEA accelerates stock releases

Oil prices settled lower on Wednesday after a volatile session as the International Energy Agency moved to accelerate previously announced oil stock releases and prioritize diesel supplies.

US West Texas Intermediate fell 0.55% to $88.97 while Brent crude futures were up 0.40% to $100.98.

The IEA said completing previously announced releases as quickly as possible could bring about 100 million barrels to the market.

Analysts and some governments, however, said that figure did not necessarily represent a new intervention of that size.

France is also set to release 10 million barrels of diesel from its strategic reserves, according to Franceinfo radio.

US crude inventories fell by 3.2 million barrels last week to 424.1 million barrels, according to the Energy Information Administration. Analysts had expected inventories to rise by 1.7 million barrels.

US Treasury yields hit multi-year highs

Treasury yields also remained elevated, with the 10-year yield briefly reaching 5.36%, its highest level since 2002, before retreating after a strong auction.

The 10-year yield was last around 5.286%, while the 30-year yield traded below its 24-year high at 5.67%.

The Treasury sold $39 billion of 10-year notes on Wednesday.

BMO described the auction as “strong,” with non-dealer investors accounting for a higher-than-average share of demand.

Indirect bidders, including global central banks, took 80.3% of the notes, compared with a 72.4% average across the previous 10 auctions.

Dealers bought 2.5%, well below the 9.4% average.

Still, the auction yield of about 5.3% was the highest since 2000.

Treasury yields have risen as investors assess inflation and higher energy prices, with the 10-year yield up about 60 basis points since the end of July.

Bitcoin falls as crypto market faces macro pressure

Bitcoin declined nearly 3% to around $83,313 after reaching about $86,000 earlier in the week, weighing on major cryptocurrencies.

Ethereum fell more than 4.6% to around $2,560, while XRP and Solana each declined about 5% and 3%, respectively.

Leverage amplified the decline, with CoinGlass data showing about 1.25 million traders liquidated over 24 hours, with total liquidations reaching $717.58 million.

Bitcoin liquidations totaled about $185.83 million, including $174.95 million in long positions.

The selloff also affected crypto-related stocks, including Strategy, Coinbase, Circle Internet Group and Robinhood Markets.

Higher Treasury yields and expectations for further Fed rate increases added to the pressure on risk assets.

Minutes from the Fed’s September meeting showed most officials believed another rate increase would likely be appropriate by year-end.

Micron stock rises after analyst raises target

Micron Technology shares rose about 3.74% on Wednesday after DA Davidson analyst Gil Luria raised his price target to $3,000 from $2,100.

Luria said investors remain “early in their journey” in understanding Micron and argued that the market has not fully reflected the company’s expected growth over the next three to five years.

His bullish outlook is based partly on expectations that memory-chip demand will remain above supply for several years as AI data centers expand.

He said memory is important for AI performance, with high-bandwidth memory becoming increasingly important for AI accelerators.

Micron shares have already gained about 230% this year, although their valuation multiple has declined as earnings expectations have risen faster than the stock price.

Luria also pointed to a potential share buyback program as another catalyst, with Micron expected to become free of significant restrictions on repurchases in December.

Separately, a union representing Micron workers in Taiwan authorized a strike over bonus and profit-sharing arrangements. The union said 99% of voting members supported strike authorization, although the timing of any action has not been decided.

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US stocks closed lower on Wednesday as a renewed rise in long-term Treasury yields weighed on equities, with investors also assessing the prospect of another Federal Reserve rate increase before the end of the year.

The Dow Jones Industrial Average fell 341.41 points, or 0.66%, to 51,179.87.

The S&P 500 declined 0.22% to 7,801.77, while the Nasdaq Composite slipped 0.22% to 27,538.69.

Treasury yields rise to multi-year highs

The 10-year Treasury yield climbed to 5.365% during the session, its highest level since April 2002, before easing after the Treasury sold $39 billion of 10-year notes.

The yield was last little changed after the auction.

The 30-year Treasury yield also reached 5.732%, its highest level since May 2002, before pulling back from its session high.

Demand at the 10-year auction was considered strong, with indirect bidders, including global central banks, taking 80.3% of the notes.

The auction yield was around 5.3%, its highest level since 2000.

Rising Treasury yields have remained a key source of pressure for stocks as investors assess inflation, higher energy prices and increasing debt levels.

The 10-year yield has risen about 60 basis points since the end of July.

Fed minutes point to another rate hike

Investors also assessed minutes from the Federal Reserve’s September meeting, which indicated that most officials considered another increase in the federal funds rate likely to be appropriate by the end of the year.

The minutes did not indicate when another increase could take place, while officials stressed that future decisions would depend on incoming economic data and the outlook for risks.

Financial markets were pricing in less than a 20% probability of another rate increase at the Fed’s October meeting, according to CME’s FedWatch tool, down from 37.6% a week earlier.

Higher yields weighed on several parts of the stock market.

Bank shares declined, with Goldman Sachs and Bank of America each falling 1%, while Wells Fargo, Citigroup and JPMorgan also ended lower.

Technology stocks also came under pressure as investors considered the impact of higher borrowing costs on artificial intelligence investment.

CrowdStrike fell nearly 5%, while Palo Alto Networks and Meta Platforms declined more than 3% and 2%, respectively.

Oil prices and AI spending remain in focus

Oil prices remained elevated, adding to concerns about inflation and interest rates. US crude traded just below $90 a barrel, while Brent crude was around $101.

Brent had briefly moved above $100 earlier in the session before turning lower after the International Energy Agency agreed to speed up the release of oil stocks, with diesel supplies prioritised.

The move helped stocks pare some of their losses.

Housing-related stocks also weakened as higher Treasury yields pushed mortgage rates higher. Housing stocks fell 2.3%, while homebuilders declined 2.9%.

Chip stocks, which had gained more than 80% this year, also ended lower.

SpaceX shares retreated following reports that the company was seeking $40 billion in financing to purchase Nvidia chips.

Investors are now turning towards the third-quarter earnings season, with financial companies expected to begin reporting in earnest next week.

Analysts expect S&P 500 earnings to grow 30.6% year over year for the July-through-September period.

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