Al Root

Tesla stock soared on Wednesday after President Donald Trump paused his so-called reciprocal tariffs on countries other than China for 90 days. Wild trading continues.

Shares of the electric vehicle maker were up more than 20% at $266.99 in midday trading at $252.99, while the S&P 500 and Dow Jones Industrial Average were up 7.1% and 6%, respectively.

Closing at that level would be the third-highest gain in Tesla's history. Shares gained 21.9% on Oct. 24, 2024, and jumped 24.4% on May 9, 2013.

"I have authorized a 90-day PAUSE, and a substantially lowered Reciprocal Tariff rate during this period or 10%, also effect immediately," wrote the president on Truth Social. He increased tariffs on China because it raised tariffs on U.S. imports as a response to Trump's levies.

Before the tariff news, shares got a bump from Benchmark analyst Mickey Legg, adding Tesla stock to "Benchmark's Best Ideas" list.

"Our focus is on the release of a new Tesla model in second-quarter 2025, which in our view could turn around the recent decline in vehicle sales," wrote Legg. "Furthermore, we're cautiously optimistic about the rollout of Tesla-operated robo-taxis as a paid service in Austin, TX scheduled for June."

He did cut his Tesla price target to $350 a share from $475. That takes some of the energy out of the "Best Ideas" addition.

The Wednesday jump came after a wild Tuesday. Tesla stock ranged from $250.44 to $217.80, up 7.4% to down 6.6%, before closing at $221.86, down 4.9%. Tesla's stock move mirrored the market as investors continued to struggle with President Donald Trump's tariff policies.

Investors watching shares fluctuate widely on Tuesday might have missed a potentially important tariff-related development in the Trump administration.

Advisor Peter Navarro is a staunch defender of tariffs and one of the architects of Trump's trade policy. Tesla CEO Elon Musk doesn't seem as thrilled with steep tariffs. They raise costs for his car company, putting demand, profits, and jobs at risk.

"We all understand in the White House...that Elon is a car manufacturer...but he's not a car manufacturer, he's a car assembler," Navarro said on CNBC recently, adding that Tesla gets parts from all over the world, something Navarro doesn't want to continue.

"Navarro is truly a moron," replied Musk in a Tuesday post on his social-media platform X. "What he says here is demonstrably false."

For starters, all car makers are car assemblers. Everyone buys parts. And some 65% of all the parts in a Tesla sold in the U.S. are sourced from the U.S. or Canada. (The government groups the U.S. and Canada together.) That is enough for Tesla to be consistently ranked as one of the most American-made car brands by Cars.com.

Musk followed up with additional posts critical of Navarro and defending Tesla's manufacturing footprint.

The public spat is, at least, a watch item for investors because both men have the president's ear.

Navarro advises on trade and Musk, of course, helps lead DOGE, the organization responsible for eliminating needless government spending.

Musk isn't a fan of broad tariffs, saying over the weekend that the U.S. and Europe should not impose any tariffs on each other.

Investors desperately want Trump to soften his stance on tariffs. Musk might end up being the one who can help make that happen.

Just how desperate are investors getting? Coming into Wednesday trading, the S&P 500 was down 12.1% since Trump's "Liberation Day" on April 2. Tesla stock was off 21.5% over the same span.

That was only six days ago. For investors, it probably feels like six weeks.

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

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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April 09, 2025 15:28 ET (19:28 GMT)

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