Why Tesla shares rose around 3% in premarket trading on Thursday – Tesla (NASDAQ:TSLA)

Shares of the electric vehicle manufacturer Tesla subsidiary TSL rose sharply in premarket trading on Thursday. The uptrend is in line with the momentum of index futures, which rose sharply early Thursday.

The optimism about the stock could be due in large part to the Fed's 50 basis point cut in the benchmark interest rate, which serves as a benchmark for all other interest rates such as mortgages, credit cards and other loans.

The electric vehicle industry has been in crisis since 2022, with demand slowing as customers cut spending in the face of high interest rates and high inflation. The Fed's rate cut should provide some relief to consumers as it would lower their borrowing costs. Tesla CEO Elon Musk has complained several times about the impact of higher tariffs on sales.

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The stock could also be supported by Tesla's continued strength in China, one of its key markets. Weekly auto insurance data from China showed 15,600 insured registrations for Tesla vehicles in the week of Sept. 9-15, CnEVPost reported, citing data from Li Auto, Inc. LI.

Comment on the data, fund manager Gary Black said Tesla's new registrations in China are on track for their best quarter ever, 11 weeks into the quarter with just two weeks remaining. Quarter to date, the number is up 20% year-on-year and 26% higher than the first quarter, he added.

In premarket trading, Tesla shares rose 2.88% to $233.74, according to data from Benzinga Pro.

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Image courtesy of Tesla