Tesla stock soared early Monday after the U.S. and China de-escalated trade tensions.

Shares of the electric-vehicle maker were up 7.7% at $321.17 in premarket trading. S&P 500 and Dow Jones Industrial Average futures were up 2.8% and 2.1%, respectively.

Premarket prices sent Tesla's market value back above $1 trillion, which hasn't happened since late February.

Over the weekend, President Donald Trump said, "A very good meeting [Saturday] with China, in Switzerland. Many things discussed, much agreed to," on Truth Social. "We want to see, for the blood of both China and the U.S., an opening up of China to American businesses."

For the next 90 days, the base tariff rate the U.S. will impose on Chinese goods will be 10%, down from 34%. Extra tariffs added in subsequent actions are also suspended while the two sides continue trade talks. China also is lowering its tariffs.

Tariffs on Chinese imports were north of 100% before the 90-day pause. Levies that high are essentially a trade embargo. "Positive step in the right direction," wrote Wedbush analyst Dan Ives in a report Sunday.

For Tesla, China is an important market. Its most productive car plant is in China, and the country accounted for 22% of total revenue in 2024. Tariffs don't drive cost increases for Tesla as parts tend to be sourced locally. The impact is more about perception.

Chinese consumers are now choosing BYD vehicles over Tesla cars, Cantor Fitzgerald analyst Andres Sheppard told Barron's in a recent interview. "There's now the sentiment in China that they're essentially encouraging the consumer to purchase non-American products, or in this case, Chinese products."

Tesla would like to see that sentiment reverse. Chinese sales in the first quarter fell about 2% year over year, according to industry data tracked by Wall Street. Sales in the first five weeks of the second quarter were down about 15% year over year, according to data tracked by Citi analyst Jeff Chung.

Tesla shares dropped more than 10% over a couple of days in mid-April while tariff rates between the U.S. and China escalated. Shares closed below $230 on April 21.

The stocks enters this week just under $300. Along with a reduction in trade tensions, investors are optimistic about Tesla's self-driving taxi service, which the company plans to launch in June in Austin, Texas.

CEO Elon Musk reiterated the June timeline on Tesla's first-quarter earnings conference call on April 22.

Robotaxis and trade should continue to move shares in the coming weeks, with the former issue taking over the closer investors get to June.