• NYSE:NIO turned lower on Tuesday as the focus shifted to US inflation data.
  • Nancy Pelosi’s visit to Taiwan is not going over well with the Chinese government.
  • Institutional investors are also rotating out of Nio as geopolitical tensions rise.

Update: NYSE NIO fell for the third straight trading day and hit the lowest in a week at $19.02. The stock price of the Chinese Electric Vehicle (EV) maker eroded 4.96% on Tuesday to settle at $19.17. NIO stock tracked the weakness across the major Wall Street indices, triggered by a sharp sell-off in the tech-intensive Nasdaq Composite Index after Micron Technology Inc. became the latest chipmaker to warn about slowing demand and fanning economic concerns. Markets also refrained from placing bets on riskier assets ahead of Wednesday’s critical US inflation data. The US Consumer Price Index (CPI) will set the tone for markets in the coming weeks, as it will heavily impact the Fed’s next rate hike decision. The main driver, however, behind NIO stock’s slump was the news that Advisor Group Holdings Inc. lessened its position in shares of Nio Inc by 1.5% during Q1, according to its most recent Form 13F filing with the Securities & Exchange Commission (SEC). 

NYSE:NIO saw its win streak snapped at seven straight sessions, although Friday’s losses are not directly attributed to the performance of the company. Shares of NIO slipped lower by 3.25% and closed the trading week at $20.22. Stocks pulled back on Friday after a red-hot July jobs report blew out expectations. While this can definitely be seen as a positive, it likely means the Fed will be more aggressive in raising its rates in September. Overall, the Dow Jones added 76 basis points, the S&P 500 fell by 0.16%, and the NASDAQ dropped lower by 0.50% during the session.

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The reason for Nio’s decline on Friday? Speaker of the House Nancy Pelosi’s recent visit to Taiwan was against the wishes of the Chinese government. China has now ceased all cooperation with the US when it comes to climate cooperation. Could there be more shoes to fall from this? With rising geopolitical tensions between the two superpowers, investors were betting that this is just the start of the fallout. Most US-domiciled Chinese ADR stocks were on the decline Friday, as concerns about these companies being delisted from US exchanges is once again rearing its ugly head.

NIO stock forecast

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 At least one major institution is also feeling the heat from the tensions between the US and China. French banking group BNP Paribas disclosed that it had sold off about 90% or nearly 275,000 shares of Nio. Instead, BNP Paribas has added nearly 3.4 million shares of EV startup Polestar (NASDAQ:PSNYW) which is owned by Volvo and Chinese EV company Geely Motors.

Previous updates

Update: NYSE NIO ended Tuesday dip in the red, settling at $19.18 after losing 4.93%. Stock markets struggled to retain the green at the opening but quickly gave up amid lingering US inflation figures and renewed tensions between Europe and Russia. The latter reportedly suspended oil flows via the southern leg of the Druzhba pipeline amid transit payment issues, exacerbating the energy crisis in the Old Continent. Meanwhile, all eyes shift to US data.

The Consumer Price Index is expected to have contracted from a multi-decade high of 9.1% YoY in June to 8.6%. However,  the core reading for the same period is foreseen to have advanced to 6.1% from the current 5.9%. Volatility was restricted ahead of the event as market players turned cautious. The Dow Jones Industrial Average shed 0.17%, while the S&P 500 lost 20 points. The worst performer was the Nasdaq Composite, which ended the day down 150 points or 1.19%.

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