(Vincent Feuray/Getty Images)

As goes Tesla, so goes the US stock market

(Or, if you prefer, as goes the US stock market, so goes Tesla.)

5/28/25 11:44AM

For much of the past year, Tesla has been the S&P 500 on steroids.

In fact, the correlation of daily returns between the electric vehicle maker and the benchmark US stock index over the past three months is at its strongest level on record.

“Tesla is a high-beta stock and it’s also a stock that’s highly retail driven,” Gordon Johnson, CEO and founder of GLJ Research, said. “So when you get a rally in the stock market, you get a significant rally in the higher-beta stocks because those are the stocks that everyone piles into.”

Generally, one would expect a stock in the S&P 500 to be strongly positively correlated to this benchmark, and this holds true for most of those companies — but as the above chart shows, the electric vehicle maker is often an exception.

Tesla has the distinction of being a high-beta, volatile, large-cap stock whose daily changes are often quite weakly linked to those of the benchmark index. Apple and Microsoft, for instance, have had a correlation of 0.7 and 0.76, respectively, to the S&P 500 since Tesla IPO’d. The EV maker, meanwhile, has a correlation of 0.43 over the lifetime of its listing.

The best explanation for this is that the stock’s connection to its near-term fundamentals has often been tenuous. What can carry the day (and week, and year) are the ebbs and flows of the conviction that CEO Elon Musk’s loyal following has in the ability of the world’s richest man to make his vision of the future a reality.

And, per Johnson’s observation, Tesla’s tight connection recently to the S&P 500 is emblematic of the increased importance of retail traders who are gung ho about popular momentum stocks in dictating the course of the overall price action.

“For right now, being long Tesla is not really being long the stock,” Johnson added. “It’s a levered long on the market, because as the market goes up, you have a lot of people, a lot of participants in the market using Tesla as a means to express the market going up.”

Max Knoblauch1h

Southwest cuts its earnings outlook on lost revenue due to government shutdown

Another big four airline has put a price tag on the 43-day government shutdown.

Southwest Airlines on Friday said lower revenue due to a temporary decline in demand during the shutdown, together with higher fuel costs, will ding its annual earnings before interest and taxes by between $100 million and $300 million. The carrier lowered its full-year EBIT outlook to $500 million, down from a prior range of $600 million to $800 million.

According to Southwest’s filing, bookings have returned to previous expectations following the end of the shutdown. Its shares dipped down about 1% in premarket trading.

The carrier joins Delta Air Lines in assigning a cost to the government closure. Earlier this week, Delta said the shutdown would cost it $200 million in the fourth quarter.

Luke Kawa1h

Netflix is acquiring Warner Bros. and HBO assets for less than it’s spent to add content since the pandemic started

What would you, as a viewer, rather watch:

Every new piece of content that’s appeared on Netflix since the pandemic started, or all the original series ever produced by HBO as well as the 100-year-plus portfolio of Warner Bros. films?

That’s one lens through which to view the streaming giant’s agreement to buy Warner Bros. studio and streaming assets for an equity value of $72 billion or an enterprise value of $82.7 billion (which factors in the debt Netflix is assuming from the acquired entity).

Since the end of 2019, Netflix has sent over $87 billion in cash out the door to add content assets to its vast library.

The good news is that presumably, you won’t have to make that choice. Presumably, in the event that this merger is approved and any existing distribution deals lapse, this library will be rolled up under one roof. That’ll probably entail higher subscription costs for Netflix subscribers; what the net cost for those who subscribe to both services ends up being is one of many things that are very much up in the air.

“By adding the deep film and TV libraries and HBO and HBO Max programming, Netflix members will have even more high-quality titles from which to choose,” per the press release. “This also allows Netflix to optimize its plans for consumers, enhancing viewing options and expanding access to content.”

Luke Kawa2h

Oklo slides after launching $1.5 billion at-the-market equity offering program

Oklo has no revenues and an extremely high valuation.

Put the two together and this happens:

After the close on Thursday, a filing showed that the nuclear energy company entered into a pact with various financial institutions to sell up to $1.5 billion worth of its stock in an at-the-market equity offering program.

Shares are down about 5.5% as of 7:20 a.m. ET.

This is Oklo’s third equity offering of the year, per Bloomberg data.

The stock had been on a tear recently ahead of this announcement, rising nearly 30% over the prior three sessions amid elevated options market activity.

Hyunsoo Rim3h

SoFi Technologies slides on $1.5 billion share sale announcement at $27.50 a share

SoFi Technologies is down more than 7% in early trading on Friday after the company revealed plans to raise $1.5 billion through a public stock offering, with shares to be priced at $27.50 each — a discount of roughly 7% from Thursday’s closing price of $29.60.

The offering includes a 30-day option for the underwriters to purchase up to 8,181,818 more shares, equivalent to an additional 15% of the nominal offering, which is expected to close December 8.

Proceeds from the offering will go toward “general corporate purposes,” SoFi said, including “enhancing capital position, increasing optionality and enabling further efficiency of capital management, and funding incremental growth and business opportunities.”

The sale comes as SoFi’s stock has been on a tear this year — nearly doubling (up 97%) in 2025 before this morning’s slump. The company also posted better-than-expected Q3 sales and profits back in October, driven by growth outside its original lending business, including trading, wealth management, mortgages, and credit cards.

CEO Anthony Noto has repeatedly emphasized SoFi’s push beyond lending. In November, the company launched a priority waitlist for SoFi Crypto, enabling users to trade dozens of cryptocurrencies, including bitcoin, ethereum, and solana.

The stock is hovering around the offering price of $27.50 on Friday.

Tom Jones5h

Netflix agrees to $83 billion deal for Warner Bros. Discovery’s streaming and studio businesses, at $27.75 per share

Netflix this morning announced that it will acquire the Warner Bros. side of the Warner Bros. Discovery business — which includes its studio and streaming businesses — in a deal worth $82.7 billion, or $27.75 per share.

Per the press release:

“The transaction is expected to close after the previously announced separation of WBD’s Global Networks division, Discovery Global, into a new publicly-traded company, which is now expected to be completed in Q3 2026.”

The streaming giant beat out competition from other suitors like Comcast and Paramount Skydance, the latter of which had been crying foul about the sales process just yesterday, having sought a deal for the WBD business in full, including its vast array of networks, which will now be spun out as Discovery Global.

Unless halted by regulators, when the deal closes in the estimated 12 to 18 months, Netflix will pick up IP such as the “Harry Potter” franchise and DC universe through the Warner Bros. studio division, as well as the company’s burgeoning streaming division, including HBO Max — an addition that one recent report suggested might not significantly boost Netflix’s market share, sending shares tumbling on Wednesday.

While it’s still far too early to say what impact the potential deal will have on the biggest film and TV streaming business in the world, and the wider world of entertainment in general, NFLX investors haven’t seemed hugely enthused by the prospect throughout the process, and shares have slipped as much as ~3.2% in premarket trading.