Tesla (TSLA) stocks saw a 10% increase on Monday in response to reports indicating that the Trump administration is likely to exempt certain sector-specific tariffs while imposing reciprocal levies on April 2.

Investors capitalized on the stock's nearly 40% decline this year so far by investing in the electric vehicle company. The positive outlook on tariffs sparked a surge in the stock market, particularly in technology shares, driving the three major U.S. indexes to reach two-week highs.

If the current gains hold, Tesla is set to experience its largest single-day percentage increase since November 6, coinciding with Trump's presidential election victory. The company's shares have faced a tumultuous period in the first quarter, affected by heightened competition, weakening electric vehicle demand, and concerns about CEO Elon Musk's political engagements potentially diverting attention from the business.

Some investors may consider that the negative news has already been factored into the stock price, creating an opportunity to buy, as stated by Dan Coatsworth, an investment analyst at AJ Bell.

Elon Musk recently encouraged investors to retain their Tesla stocks in a live-streamed meeting, emphasizing the company's potential. Retail investors have shown a strong interest in Tesla's shares, with data from J.P. Morgan indicating more than two buy orders for every sell order by 10:30 a.m. ET.

The source of this information is Deborah Sophia in Bengaluru, with editing by Shounak Dasgupta.