Why Tesla Stock Is Bouncing Higher Today

After a big sell-off yesterday, Tesla (NASDAQ: TSLA) stock is seeing rebound momentum in Friday's trading. The company's share price was up 5.6% as of 3 p.m. ET. Meanwhile, the S&P 500 index was up 1.1%, and the Nasdaq Composite index was up 1.3%.

Tesla's stock gains today primarily stem from two sources. For starters, the broader market is seeing bullish momentum thanks to new employment data that is easing inflation concerns. The stock is also getting a boost from indications that a recent flare up in tensions and disagreements between CEO Elon Musk could be moderating.

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Tesla stock sees some recovery after yesterday's big sell-off

Tesla's share price fell 14.3% in Thursday's trading after Elon Musk ramped up his criticism of President Trump and his budget bill. Musk had previously been a vocal supporter of Trump and headed up the Department of Government Efficiency (DOGE) initiative before departing from the role at the end of last month.

Tesla had previously seen bullish valuation momentum in conjunction with expectations that Musk's relationship with Trump could help open up and accelerate growth avenues, and investors reacted negatively to the intensifying feud. But today brought indications that the schism and war of words may be de-escalating, and this helped power some recovery for the stock.

Are the latest U.S. employment numbers good for Tesla stock?

Bureau of Labor Statistics (BLS) revealed that the U.S. economy added 139,000 non-farm jobs in May -- ahead of the 125,000 additions called for in estimates. On the other hand, additions for April and May were revised downward by 30,000 and 65,000, respectively.

While there are multiple indicators in the BLS report that should be viewed in the broader context, investors are generally betting that the employment data supports the potential for the Federal Reserve to deliver an interest rate cut this year. Investors have been hoping that the Fed will cut rates and create a more favorable trading backdrop for stocks, but concerns about tariffs, inflation, and the overall state of the economy have prompted the central banking authority to take a cautious approach. Along with the rollout of its robotaxi service and vehicle sales, macroeconomic dynamics will be a top catalyst for Tesla stock this year.

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Keith Noonan has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Tesla. The Motley Fool has a disclosure policy.