Tesla stock pops after Trump comments on China tariffs and Powell, despite weak earnings

Tesla shares popped 5% after CEO Elon Musk suggested that he will spend more time at the company and tariff optimism from the White House lifted broader investor sentiment.

Shares were initially flat postmarket, jumping on tariff optimism after President Donald Trump signaled that duties on China won't be as high as 145% and said he has "no intention" of firing Federal Reserve Chair Jerome Powell ahead of Tesla's earnings call.

The president had previously intensified pressure on the central bank chair, declining to rule out firing Powell before the end of his term.

The electric vehicle maker reported lackluster first-quarter results, which included a 20% year-over-year drop in automotive revenue and a 71% decline in net income. Tesla also said it would "revisit" 2025 guidance when it provides a second-quarter update.

Top and bottom line figures also fell short of estimates, with the company posting adjusted earnings of 27 cents per share adjusted on revenues of $19.34 billion. Analysts projected adjusted EPS of 39 cents on $21.11 billion in revenue.

During the company's earnings call, Musk also said he will spend "significantly" less time at The Department of Government Efficiency starting next month.

The jump in shares comes on the heels of an oversold stretch for Tesla, with shares down about 40% since the start of 2025. Trade war fears and market volatility have further added to the losses. Tesla also reported its worst quarterly drop since 2022 in the period ending in March.

Piper Sandler called the report the "best result that TSLA bulls could've reasonably hoped for" adding that "management said enough to keep the dream alive. While questions linger, the report helped ease some concerns, the firm said.

Meanwhile, Goldman Sachs analyst Mark Delaney said he expects higher software revenue from Tesla's full self-driving longer term can counteract some medium-term headwinds. The firm, however, kept its neutral rating and cut its price target on the stock.

But the report wasn't enough to sway some Wall Street bears, with UBS and Wells Fargo retaining their sell and underweight ratings. Wells Fargo analyst Colin Langan trimmed the firm's price target to $120 from $130.

"Sentiment may drive the stock temporarily higher into a June robo-taxi launch, but we believe this may be a sell the news event for some investors. The potential catalyst of the low-cost vehicle launch may be removed as well," UBS said.

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