Tesla Stock’s 8% Surge Drives Market Rally

Topline

Shares of Tesla, one of the worst-performing major stocks of 2022, were on a positive note Thursday amid a broad rally in a market that seems to be ending a not-so-good, too-bad year.

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The main facts

Tesla shares rose 8% to $121.68 in early trading, building on Wednesday’s 3.3% gain and erasing Tuesday’s 11.5% loss due to supply and demand disruptions. the one linked to Covid was in China.

The U.S. automaker added 1.6 percent to the S&P 500 and 2.2 percent to the tech Nasdaq, while the Dow Jones Industrial Average, which excludes Tesla, rose 1 percent, or 330 points, in early trade.

The broad increase comes largely in response to the release of the latest jobs data from the Labor Department, which revealed that initial jobless claims rose 4% last week to 225,000 as markets braced for any signs of labor market softening that could lead to The Federal Reserve is happy. relax to increase your interest rate.

Bond markets also rose, with the yield on the 10-year US Treasury note down two basis points to 3.86%.

Fix you

Tesla is still down 70% and was the 499th best performer in the S&P as of Wednesday. The Dow, S&P and Nasdaq each posted their worst annual return since 2008.

Key Background

The market’s wild 2022 follows one of the richest periods ever for stocks, with the Dow gaining nearly 90% from March 2020 to last December. But the rally was accompanied by the highest inflation in four decades, prompting the Fed to raise interest rates to slow the economy. Like Tesla, other historically high growth stocks have also declined in the market, with Amazon, Netflix and Meta all down 50% or more year-to-date.

Big Number

More than 800 billion dollars. That’s how much market capitalization Tesla lost from its November 2021 hike of about $1.2 trillion from its $383 billion valuation on Thursday.

Crucial Quote

“The bar is low” for investors heading into 2023 amid expectations of a recession and central bank interest rate hikes around the world, OANDA analyst Craig Erlam wrote in a note Thursday.

Further Reading

Tesla Stock Crash Gets Worse: Takes $895 Billion More As Rival Automaker Warns Tough Weeks Ahead (Forbes)

Here’s how Tesla’s 69% crash in 2022 compares to other declining stocks (Forbes)

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