Tesla Stock's 8% Surge Drives Market Rally
The Dow Jones Industrial Average rose 330 points as the stock market looked to put a dismal 2022 in the rearview mirror.
Shares of Tesla, one of the worst-performing major stocks of 2022, jumped Thursday amid a broader gain in the stock market, which looks to cap a no good, very bad year on a positive note.
Stocks rose on the second-to-last trading day of 2022.Getty Images Tesla shares rose 8% to $121.68 in early trading, building off of Wednesday's 3.3% gain and wiping away its 11.5% loss Tuesday fueled by Covid-related supply and demand disruptions in China. The American automaker fueled a 1.6% jump for the S&P 500 and a 2.2% gain for the tech-heavy Nasdaq, while the Dow Jones Industrial Average that doesn't include Tesla rose 1%, or 330 points, in early trading. The broader increases largely come as a reaction to the release of the latest employment data from the Labor Department, revealing initial jobless claims rose 4% last week to 225,000 as the market cheers on any indication of a softening labor market that could lead the Federal Reserve to relent on its interest rate hikes. Bond markets also climbed, with yields on 10-year U.S. Treasury notes down two basis points to 3.86%.
Tesla is still down 70% year-to-date and was the 499th-best performer on the S&P as of Wednesday's close. The Dow, S&P and Nasdaq are each on pace for their worst annual return since 2008.
The market's brutal 2022 follows one of the most prosperous periods ever for stocks, with the Dow gaining nearly 90% from its March 2020 trough to last December. But the highest inflation in four decades accompanied the rally, leading the Fed to increase interest rates in an effort to slow the economy. Like Tesla, other historically high-growth stocks have also underperformed the market, with Amazon, Netflix and Meta all falling 50% or more year-to-date. More than $800 billion. That's how much market capitalization Tesla lost from its November 2021 high of about $1.2 trillion to its $383 billion valuation Thursday.
'The bar is low' for investors heading into 2023 amid expectations of recessions and central bank interest rate increases across the globe, OANDA analyst Craig Erlam wrote in a Thursday note. Tesla Stock Crash Worsens: Losses Top $895 Billion As Rival Carmaker Warns Of ‘Challenging' Weeks Ahead (Forbes)
Here's How Tesla Stock's 69% Crash In 2022 Compares To Other Slumping Stocks (Forbes)