Tesla shares have hit their highest point since February, climbing 7%. This increase comes after a stable period and matches trends seen in other stocks like Oracle. Market activity suggests a meme-driven approach, boosted by talks about AI and possible interest rate cuts. While some are cautious about the Federal Reserve’s next moves, any drops in stock prices might offer buying chances.

Market Movements

In other financial news, major markets are experiencing changes, including a possible US tariff on EU goods, shifts in the US dollar, and changes in Microsoft shares. A general risk warning points out the complexities of foreign exchange trading and stresses the need to understand the associated risks. It’s wise to review personal investment goals and talk to financial advisors. InvestingLive provides market information for educational purposes but clearly notes that it doesn’t give investment advice. They advise clients to examine outside sources and state that they are not responsible for any financial losses that may come from relying on their information. The website also includes a disclaimer about potential compensation from advertisers based on user interactions.

Powerful Breakout

Tesla is experiencing a strong breakout, reaching its highest level since February 2025. Shares have pushed past $215, with the next target being the 2024 high near $250. The surge in call option volume, particularly for short-term contracts, indicates that traders expect the stock to keep rising. This trend reflects a wider meme-driven market, largely fueled by the AI narrative. We recently saw a similar spike with Oracle, and AI-focused ETFs have attracted over $15 billion in just the last quarter. For now, traditional metrics like earnings are taking a backseat to pure momentum and stories. A key factor behind this is the expectation of a shift from the Fed, especially with next week’s FOMC meeting on the horizon. The latest CPI data from August 2025 showed a slight cooling at 3.1%, raising hopes that the Fed has finished increasing rates. Even if Powell sounds cautious, any resulting dips should be viewed as buying opportunities since many believe rate cuts are likely by November. For those trading derivatives, it’s wise to avoid holding short positions on high-momentum stocks. With the VIX at a low 14, purchasing call options or call spreads on stocks like Tesla can provide leveraged gains while managing risk. Consider using the increased volatility around next week’s Fed decision to sell cash-secured puts on dips, allowing you to collect premiums while betting that support will hold. Create your live VT Markets account and start trading now.

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