What Happened?
Shares of electric vehicle pioneer Tesla (NASDAQ: TSLA) jumped 10.5% in the afternoon session after Reuters reported that the company planned to roll out FSD (full self-driving - highest level advanced driver assistance software) in China. This update signaled meaningful progress in gaining regulatory approval in one of the world's most competitive electric vehicle markets.
Separately, stocks rebounded (Nasdaq +2.0%, S&P 500 +1.5%) following a report from The Wall Street Journal stating that the Trump administration's reciprocal tariffs, to be announced on April 2, 2025, would be more narrowly targeted. The market reaction indicated that investors took that as a sign the economic impact of the tariffs, particularly on inflation and growth, might not be as bad as they initially feared.
That's a bit of a relief, which likely gave businesses and analysts some space to rethink their outlooks. Earlier, the administration had hinted at much broader tariffs that could have hit any country placing duties on U.S. imports, so this shift was likely a welcome surprise for the market.
The shares closed the day at $278.44, up 11.8% from previous close.
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What The Market Is Telling Us
Tesla’s shares are extremely volatile and have had 122 moves greater than 2.5% over the last year. But moves this big are rare even for Tesla and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 5 days ago when the stock gained 4.2% on the news that Cantor Fitzgerald analysts upgraded the stock from Neutral to Buy. The analysts added "With Tesla's shares now down ~45% YTD, we upgrade Tesla to Overweight (from Neutral) ahead of upcoming material catalysts; Our $425 12-month PT is unchanged."
Separately, Bloomberg reported the company received approval from the California Public Utilities Commission for a passenger transportation permit. The permit represented significant progress towards Tesla's plan to enter the autonomous Robotaxi market. Some analysts considered the move a potential contributor to future growth.
Tesla is down 26.5% since the beginning of the year, and at $278.90 per share, it is trading 41.9% below its 52-week high of $479.86 from December 2024. Investors who bought $1,000 worth of Tesla’s shares 5 years ago would now be looking at an investment worth $8,284.
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