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Tesla stock closed at its highest level since February.

David Paul Morris/Bloomberg

Stock in


Tesla

didn’t act like shares of the fast-growing leader in the rapidly expanding high-tech market for electric vehicles on Monday. Rates rose and tech stocks fell, but Tesla continued its upward march, behaving more like a traditional auto company.

What gives?

The yield on the 10 year U.S. Treasury note rose to 1.48% from 1.45% Monday. It was a small move, but rising bond yields always matter for richly valued tech stocks because they reduce the current value of the profits those companies are expected to produce in the future. Higher yields tend to hurt tech stocks’ valuations, which is how it played out for the broader market.

The

Nasdaq Composite,
home to richly valued tech stocks, fell about 0.5%. The

Dow Jones Industrial Average,
containing a lot of old-economy stocks, rose about 0.2%. The

S&P 500,
for its part, closed down about 0.3%.

Like the Dow index, car stocks did fine with rising yields. Companies such as


General Motors

(ticker: GM) and


Ford Motor

(F) have substantial cash flows today and are favorites of value-oriented investors. GM stock rose about 1.9% Monday. Ford shares gained about 2.8%.

All that made a lot of sense and matched the historical pattern.

The odd thing is that Tesla (TSLA) stock rose along with the other two auto makers, adding 2.3%, closing at $791.36 a share. It was Tesla’s highest close since Feb. 17, when it closed at $798.15, according to Dow Jones Market Data. Tesla stock is down 1.6% in premarket trading Tuesday.

Tesla isn’t valued like a traditional auto maker. It typically struggles when rates rise. Shares trade for about 100 times estimated 2022 earnings. Ford and GM shares trade for single-digit price-to-earnings ratios.

And back in February, when interest rates rose, Tesla stock fell about 15% for the month. Ford stock gained 11%, while GM stock was up 1%.

It’s unlikely that Monday’s gain came because investors decided Tesla should be treated like a car stock. Something else must be going on. The most likely expectation is that Tesla investors are expecting strong third-quarter delivery figures.

The numbers will be reported in early October, and possibly this week. Analysts expect about 221,000 vehicles were delivered in the third quarter, compared with about 201,000 in the second quarter.

Each new quarter for Tesla tends to be a delivery record. The company’s goal is to increase deliveries by more than 50% a year on average for the foreseeable future.

Write to Al Root at [email protected]

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