Why Tesla (TSLA) Stock Is Trading Up Today

What Happened?

Shares of electric vehicle pioneer Tesla (NASDAQ:TSLA) jumped 6.1% in the afternoon session after CEO Elon Musk and President Donald Trump appeared to de-escalate their recent tensions. The spat contributed to the double-digit decline in Tesla's stock price the previous day. 

Musk retreated from his earlier threat to decommission the Dragon spacecraft after Trump hinted at halting federal contracts and subsidies for Musk's businesses (including Tesla). 

Although there were rumors of a potential conciliatory phone call between the two, the White House downplayed any such plans.

The shares closed the day at $295.13, up 3.7% from previous close.

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What The Market Is Telling Us

Tesla’s shares are extremely volatile and have had 132 moves greater than 2.5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

The previous big move we wrote about was 1 day ago when the stock dropped 4.9% as momentum slowed after a 40% rally that followed the Q1 2025 selloff, suggesting that the recent surge may have exhausted short-term buying interest. It is also possible some investors were taking profits amid uncertainty as they wait for more concrete updates on Tesla's highly anticipated product updates scheduled for later this year. These updates are critical for improving Tesla's growth story, as reported sales in Europe and China were weak in the first quarter of the year. 

Contributing to the pullback, a widely circulated Bloomberg report resurfaced concerns about the safety of Tesla's driver-assistance technology, highlighting a fatal 2023 crash. The timing of the story is especially sensitive, as Tesla prepares to unveil its AI-powered robo-taxi service in Austin later in the month, a launch that risked being overshadowed by renewed scrutiny and could shake investor confidence in the company's autonomous driving ambitions. 

Adding to the wall of worry is Elon Musk increasingly looking like an enemy to President Trump rather than a confidant. President Trump has shown the willingness to punish companies that do not fall in line with his agenda and vision.

Tesla is down 22% since the beginning of the year, and at $295.82 per share, it is trading 38.4% 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 $4,671.

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