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Why Tesla Stock Soared on Tuesday

By Daniel Sparks - Updated Mar 24, 2020 at 1:13PM

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The growth stock skyrocketed amid the rebound in the overall market.

What happened

Shares of electric-car maker Tesla (TSLA -0.57%) soared on Tuesday, rising about 17% as of noon EDT.

The growth stock's gain comes as market indexes are jumping sharply. Also potentially helping Tesla stock on Tuesday was an analyst's upgraded view for the overall auto industry.

Tesla's Model S, 3, X, and Y

Image source: Tesla.

So what

Highlighting optimism in the stock market, the S&P 500 had climbed 7.7% by 12:08 p.m. EDT on Tuesday. The big gain came after President Trump said in a press conference on Monday evening that he may urge businesses to open up "fairly soon." 

Meanwhile, the market is likely cheering news that Congress is reportedly close to a deal on a stimulus bill to aid the economy during business shutdowns amid the pandemic.

Separately, Morgan Stanley analyst Adam Jonas upgraded the overall auto industry from a cautious rating to an in-line rating. This follows about five years of rating the industry at cautious. Jonas believes that the industry will see a sharper recovery following the coronavirus pandemic than it did after the 2008-2009 recession.

Now what

Investors have been concerned about how the coronavirus will impact Tesla's vehicle production and deliveries in 2020. The automaker officially paused vehicle manufacturing in its factory in Fremont, California, on Monday.

If President Trump does urge companies to resume operations soon, Tesla will have a greater chance of hitting its target to deliver more than 500,000 vehicles this year, up from about 368,000 in 2018.

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