US stock market today saw mixed action as the Dow Jones dropped while the S&P 500 and Nasdaq inched higher, driven by strong Alphabet earnings and cautious outlook from Tesla. Alphabet jumped over 3% after boosting its AI investment,

Tesla's market cap fell below $1 trillion, but it still reflects investors' assumptions of enormous future growth.

Tesla (NASDAQ: TSLA) closed down 8.2% at $305.30 on Thursday, retreating sharply after CEO Elon Musk's cautionary earnings commentary about "rough quarters ahead" amid macroeconomic and electric vehicle (EV) demand uncertainties.

"Tesla is crossing the chasm to autonomy while absorbing slower volume, EV incentive elimination, tariffs and investing in new initiatives that may not make margins for years," Morgan Stanley analyst Adam Jonas, a longtime Tesla bull, wrote early Thursday.

Due to Tesla's innovation and diversification, 24/7 Wall St. sees strong upside potential for the stock by the end of the decade.

US stocks climbed on Wednesday after the US struck a trade deal with Japan, lifting hopes for further tariff pacts as Wall Street prepared for Tesla (TSLA) and Alphabet (GOOGL, GOOG) earnings after the bell.

Stock market today sees S&P 500 near record highs as Alphabet rises 3.5% and Tesla slides. Dow drops on IBM miss.

Tesla is facing stiffer competition globally from electric vehicle players, especially low-cost competitors from China.

The Dow Jones index dropped Thursday amid a surprise fall in weekly jobless claims. Netflix struck a key IBD sell rule.