The Final Tally: Tesla’s 1-2 Punch Catalyst Sparks Hope... Largest Foreign Stock Dump Since 2020?

Tesla investors probably go through more emotional swings than any fanbase in the world (except maybe Dallas Cowboy fans… and at least they didn’t pay $12,000 for a Full Self-Driving feature that still asks you to keep both hands on the wheel). But today? Today felt like a rare, glorious “we told you so” moment.

Tesla shares ripped 10% higher Friday after two major catalysts dropped back-to-back. First, Tesla started refunding early Model 3 reservations in India… a clear sign they’re finally serious about entering the world's third-largest auto market after nearly a decade of teasing (and enough rumor articles to fill a library). Analysts say India could be a multi-billion-dollar opportunity if Tesla manages to dodge the country’s 70%+ import tariffs by building locally.

Then came the biggest catalyst… The U.S. Department of Transportation announced it's relaxing federal rules on self-driving vehicles. Meaning: less red tape, fewer hoops to jump through, and a much faster path to making Full Self-Driving look less like a beta test and more like a real product. (Or at least give Elon Musk more ammo for his 2030 Mars colony pitch.)

That one-two punch launched Tesla to an 18% weekly gain (its best since May 2023) and it lit up the rest of Big Tech, too. Nvidia climbed over 4% and Alphabet popped after a strong earnings beat, a dividend hike, and a $70 billion buyback announcement. Even Palantir surged 19%, as investors rediscovered their love for defense tech and government contracts. (It’s up 47% year-to-date, in case you forgot.)

“Indexland” also followed Tesla. The Nasdaq jumped 1.2% and ended the week up 6.5%... its best five-day run since early November (aka, back when people thought soft landings were a thing). The S&P 500 added 0.7%, clocking a 4.2% weekly gain. And the Dow… well, it showed up. The index inched up 0.1% and managed a 2.2% gain for the week (pretty solid for blue chips).

But just as things looked like they might stay smooth, President Trump decided to throw another curveball. Speaking from Air Force One, he made it clear that U.S. tariffs on China aren’t going anywhere “unless they give us something substantial.” And then, China’s Ministry of Commerce reiterated again that no trade negotiations are happening. Which is awkward, considering Trump told Time magazine this week that he expects “many deals” to be announced within a month.

Still, markets didn’t flinch. The VIX (Wall Street’s anxiety meter) dropped for the fourth straight day to 24.85, its lowest reading since April 2, when Trump first reignited the tariff fire. That’s down over 50% from the April 7 peak of 60.13 (so things are getting calmer).

Still, not everything under the surface looks quite as calm. Goldman Sachs reports that foreign investors have quietly sold off roughly $60 billion worth of U.S. equities since March, led primarily by European funds. It’s the biggest wave of foreign selling since the 2020 COVID crash… a sign that while American investors are celebrating the rally, overseas capital is heading for the exits.

Now all eyes are on Microsoft and Amazon next week. If they deliver strong earnings (especially on cloud and AI) this rally probably keeps grinding higher. But just when it looks safe to celebrate, that’s probably when Trump will hop back on Air Force One and announce we’re doubling tariffs on China “for fun.” Still, for all the chaos in the background, the market is bouncing back. And after the past few weeks? We'll take it.

If you read all of this, congrats for having a 10 second attention span (better than me). As always, here’s our heatmap for today.