On Tuesday, the US saw significant developments, as Tesla introduced lower-cost versions of its Model 3 sedan and Model Y SUV to counter slowing sales, while Canada and the United States held a high-profile yet inconclusive trade meeting in Washington.
In the United States, Attorney General Pam Bondi faced questions over the handling of Epstein-related files, President Donald Trump hinted at invoking the Insurrection Act amid domestic unrest, and Wall Street struggled with AI-related investor concerns amid the ongoing government shutdown.
These events underscore the intersection of economic, political, and legal challenges shaping markets and policy decisions.
Tesla unveils lower-cost EVs amid flagging sales
Tesla (NASDAQ: TSLA) introduced more affordable versions of its top-selling vehicles, the Model 3 sedan and Model Y SUV, on Tuesday, priced at $36,990 and $39,990 respectively.
The move is part of Tesla’s strategy to revive slowing sales and maintain market share in an increasingly competitive electric vehicle (EV) market.
Shares fell 4.2% in afternoon trading, reflecting investor caution over the potential impact of lower prices on profit margins.
CEO Elon Musk has long emphasized affordability as key to Tesla’s long-term growth, noting during the company’s second-quarter earnings call in July that “the desire to buy the car is very high,” but cost remains a barrier.
The new models follow the expiration of a $7,500 US EV tax credit, which had temporarily boosted sales. Analysts suggest that while the lower pricing may increase volume, it primarily represents a mix shift from premium trims rather than significant new demand.
Canada-US trade talks: warm reception, no deal
Canadian Prime Minister Mark Carney visited Washington on Tuesday for a meeting with President Donald Trump, aiming to ease trade tensions amid ongoing tariffs.
The Oval Office meeting was described as cordial, with Trump calling Carney “a world-class leader” and “a tough negotiator.”
Despite the warm exchange, no breakthrough trade agreement was reached.
Key issues remain unresolved, including a 35% levy on Canadian imports and sector-specific tariffs such as 50% on metals and 25% on automobiles, though some exemptions exist under the United States-Mexico-Canada Agreement (USMCA).
Carney has removed several countertariffs on US goods to ease tensions, but full resolution is still pending.
The friendly tone marked a departure from Trump’s combative relationship with former Prime Minister Justin Trudeau, with both leaders appearing optimistic about eventual progress.
Attorney General Bondi deflects on Epstein inquiry
Attorney General Pam Bondi declined to answer a direct question at a Senate Judiciary Committee hearing regarding who instructed FBI agents to flag documents mentioning President Donald Trump during a review of Jeffrey Epstein-related files.
Senator Dick Durbin pressed for clarification, but Bondi said she would not discuss the matter.
The issue traces back to a July letter from Durbin citing an FBI review of Epstein files and referencing Trump’s 2002 remarks about Epstein.
Bondi also addressed claims about a so-called Epstein client list, stating she had not reviewed any files and confirming that a joint Justice Department and FBI memo found no such list.
The Trump administration has faced criticism for not releasing the Epstein files despite prior assurances, fueling speculation among supporters, though official investigations have found no client list.
Trump considers invoking Insurrection Act amid domestic tensions
President Trump has suggested he may invoke the Insurrection Act, a law allowing deployment of federal troops in US cities under certain conditions.
The plan is framed as a response to unrest in cities like Chicago and Portland. Local officials and civil rights groups have criticized the idea, warning of risks to public trust, civil liberties, and increased violence.
Legal challenges are expected if troops are deployed, as definitions of “insurrection” and the scope of federal authority are contested.
S&P 500 retreats amid AI concerns and Government shutdown
US markets struggled on Tuesday, with the S&P 500 down 0.38%, the Nasdaq Composite falling 0.67%, and the Dow Jones Industrial Average declining 91 points.
Oracle shares led tech losses after reports of slimmer margins in its AI cloud business. Investors are weighing the profitability of AI investments amid significant capital expenditures.
Meanwhile, the US government shutdown entered its second week after the Senate failed to advance a funding bill on Monday, highlighting ongoing partisan gridlock and uncertainty about near-term fiscal policy.
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