3 Reasons Tesla Stock Was Up Today

Coming into Monday trading, Tesla stock was up 7% this year and 61% over the past 12 months. (ALEX MARTIN/AFP via Getty Images)

Key Points

• Tesla stock increased, with the broader market also rising due to progress in U.S.-China trade talks.
• Negotiators established a framework for a trade deal, setting the stage for discussions between President Trump and President Xi in South Korea.
• Tesla’s operating profit decreased by 40% year over year, but investors are prioritizing future AI opportunities like self-driving cars.

Tesla stock rose Monday ahead of a big week with tech earnings and President Donald Trump’s planned meeting with Chinese President Xi Jinping on tap.

Shares of the electric-vehicle maker added 4.3% closing at $452.52, while the S&P 500 and Dow Jones Industrial Average were up 1.2% and 0.7%, respectively.

Tesla stock is getting a clear lift, just as the entire market is, from trade progress between China and the U.S., the world’s two largest economies. Over the weekend, negotiators developed a framework for a trade deal, which Treasury Secretary Scott Bessent said could form the basis for discussion between President Trump and Chinese President Xi. They are slated to meet in South Korea on Thursday.

Tesla stock tends to get a little extra boost when China-related news is good. The company does a lot of business in that country: Sales in China accounted for more than 20% of 2024 sales. Easing tensions between the U.S. and China reduces the risk that the auto maker gets caught in the middle of a trade war.

The shares may also be getting a boost from optimism about earnings from Big Tech companies, some of which are due before the Xi-Trump meeting. Microsoft, Alphabet, and Meta Platforms report quarterly numbers on Wednesday. Amazon.com and Apple report on Thursday.

Those five firms are worth some $15 trillion, 25% of the value of the entire S&P 500.

Coming into Monday trading, Tesla stock was up 7% this year and 61% over the past 12 months. Including early trading on Monday, shares were flat since Tesla reported its third-quarter earnings on Oct. 22.

Tesla’s quarterly operating profit fell 40% year over year, missing analysts’ estimates, but investors are focused on future AI-related opportunities, including self-driving cars and humanoid robots.

Write to Al Root at allen.root@dowjones.com