Tesla Leads Tech Rebound After EU Tariff Easing

Tesla (TSLA) stock gained 6.94%, leading a rally in tech stocks on Tuesday, 27 May, which catapulted US indices higher. The Magnificent 7 stocks were top risers as they extended the stock market rebound after last week’s sell-off. Nvidia (NVDA) is also in focus ahead of its earnings report after the close today (Wednesday, 28 May).

The S&P 500 gained 2.05%, the Dow gained 1.78%, and the Nasdaq 100 rose 2.39% as investors celebrated US President Donald Trump's retreat from an earlier threat of 50% tariffs on the European Union.

Tesla vs Nasdaq 100 Price Performance Chart

Tesla shares have risen back over the $350 threshold, retracing over half the decline from the record high to the 2025 low. Meanwhile, the Nasdaq 100 index probes last week’s high near 21,500, just shy of the all-time high set on 19 February 2025.

*Past performance does not indicate future results 

Trump backs off 50% EU Tariffs

Sentiment in markets improved after President Trump announced, following a call with EU President Ursula von Der Leyen, that he would delay the deadline for imposing new tariffs on the European Union.

Many investors took the news positively despite the President’s track record of sudden shifts in trade policy. On Sunday, he posted on Truth Social that the new tariffs would now take effect on 9 July (the original date), reversing a threat made just two days earlier to introduce a sweeping 50% tariff on EU goods starting 1 June due to stalled trade talks. (Source: NBC News)

Tesla Stock Extends Gains

Tesla shares climbed on Tuesday amid the broader rise in markets following comments from CEO Elon Musk. Last week, Musk said he would return to “spending 24/7 at work,” with a strong focus on X/xAI and Tesla. Earlier this month, Musk also reaffirmed his commitment to remain Tesla’s CEO for at least the next five years, pushing back against speculation that the company’s board was looking for a successor.

The Rally in Tech Stocks

The Mag 7 stocks have benefited from Wall Street's increase in risk appetite. The shares are among the highest weightings in the Nasdaq 100 index, which might explain Tuesday's outperformance.

Tesla’s shares gained the most alongside Nvidia (NVDA), but most major tech companies saw share price gains, including Alphabet (GOOGL), Meta (META), Apple (AAPL), Amazon (AMZN) and Microsoft (MSFT).

The improving appetite for risk was also seen in the bond market, where 30-year Treasury bond yields fell back from a 2-year high and below the critical 5% level.

Conclusion

Tuesday’s rally highlighted a return of risk appetite as easing trade tensions between the US and EU lifted investor sentiment. Tesla led the charge, with the stock still back in favour among investors thanks to renewed confidence in Elon Musk’s leadership. The broader tech sector surged ahead of key earnings from Nvidia, helping the Nasdaq 100 near all-time highs as markets regained momentum after last week’s pullback.

*Past performance does not indicate future results