Tesla stock rose 1.5% to $412.42 earlier today after President Trump announced a memorandum of understanding to end the Iran war, lifting the broader market on reduced geopolitical risk and falling oil prices.
The deal, announced Sunday evening, includes a ceasefire, easing of foreign sanctions on Iran, ending the U.S. naval blockade, and reopening the Strait of Hormuz. International benchmark crude oil prices fell 5% to about $83 per barrel—down from above $115 in April—as investors priced in increased global oil supply and reduced shipping disruptions.
Tesla benefited from the market-wide relief rally, with S&P 500 futures up 1.4% and Dow Jones Industrial Average futures up 1% following the announcement. Global stocks and bonds surged Monday morning as investors shed geopolitical risk premiums that had weighed on equities since the conflict began three months ago.
Lower oil prices and reduced energy costs typically support broader economic growth and reduce inflation concerns—factors that lift growth-oriented stocks like Tesla. However, the relationship between oil prices and EV demand is complex. Lower gas prices make electric vehicles slightly less attractive relative to gasoline-powered cars on a cost-benefit basis. New EV sales dropped 23% year over year in April, according to Cox Automotive data, though the bigger headwind came from the loss of the $7,500 federal purchase tax credit in September.
Investors in Tesla have been focused less on near-term car sales and more on the company’s artificial intelligence strategy. Tesla launched a robo-taxi service about a year ago in Austin, Texas, and now operates robo-taxis in four cities. The company recently stopped producing the Model S and Model X vehicles to convert its Fremont, California, manufacturing capacity into a facility to mass-produce humanoid robots.
Wall Street expects Tesla to return to earnings growth in 2026 after flat results since 2022. Analysts project earnings per share to reach close to $7 by 2029, eclipsing the company’s 2022 peak of about $4.
Sources
- Barron’s — Tesla stock price movement, deal terms, oil price decline, and EV sales data
- Wall Street Journal — Global stocks and bonds rally following Iran peace agreement
- Trustnet — Stock market opening higher on US-Iran memorandum of understanding
- Anadolu Agency — Global markets rally on US-Iran peace deal and oil price decline
