Finance

Tesla Stock Surges After Musk Pay Deal Approval: How Investors Can Navigate Market Volatility

Tesla shares rose in after-hours trading after shareholders approved Elon Musk‘s pay package amidst broader market losses.

byAndres Castro

November 6, 2025, 5:42 PM

Close-up of a digital screen showing the TSLA stock chart with a pronounced red (negative) trend.

The TSLA stock ticker and a chart with a severe decline are displayed on a dark screen. By The Bold Bureau / Shutterstock.com.

Executive Summary

Tesla shareholders approved CEO Elon Musk’s substantial pay package, leading to a rise in the company’s stock in after-hours trading.

Major U.S. stock indexes, including the Nasdaq Composite, S&P 500, and Dow Jones Industrial Average, experienced significant declines on Thursday, with spiking layoff announcements contributing to negative investor sentiment.

Amidst market volatility and struggling new stock purchases, analysts suggest investors reduce market exposure by selling recent acquisitions and refraining from new positions, emphasizing a defensive strategy.

The Story So Far

The broader U.S. stock market is currently experiencing significant losses and high volatility, with major indexes declining sharply due to negative investor sentiment largely fueled by spiking layoff announcements. This market uncertainty has led to a reversal of recent gains and prompted analysts to recommend a defensive investment strategy, advising investors to reduce their exposure.

Why This Matters

The approval of Elon Musk’s substantial pay package by Tesla shareholders signals strong investor confidence in his leadership, allowing the company’s stock to rise despite a widespread market downturn. This contrasts sharply with the broader U.S. stock market, which experienced significant losses across major indexes due to negative sentiment and layoff announcements, prompting analysts to advise a defensive investment strategy amidst increasing volatility and a potential market correction.

Who Thinks What?

Tesla shareholders demonstrated confidence in Elon Musk’s leadership and the company’s direction by approving his substantial pay package, which led to a rise in the company’s stock in after-hours trading.

The broader U.S. stock market, including major indexes like the Nasdaq Composite, S&P 500, and Dow Jones Industrial Average, experienced significant declines due to spiking layoff announcements and negative investor sentiment, indicating widespread caution.

Investment analysts and strategists advised investors to adopt a defensive strategy, suggesting they reduce market exposure, potentially by selling recent acquisitions and refraining from new positions.

Tesla shareholders approved a substantial pay package for Chief Executive Elon Musk on Thursday, causing the company’s stock to rise in after-hours trading, even as the broader U.S. stock market experienced significant losses. Major indexes, including the Nasdaq Composite, S&P 500, and Dow Jones Industrial Average, declined sharply during the regular session, with spiking layoff announcements contributing to negative investor sentiment.

Market Performance on Thursday

The Nasdaq Composite led the declines, falling 1.9%, marking its second solid loss this week. The S&P 500 index dropped 1.1%, and the Dow Jones Industrial Average sank 0.8%. All three major indexes closed below their 21-day moving averages, while the small-cap Russell 2000 tumbled 2.4%, falling back below its 50-day moving average.

Many leading stocks, including recent purchases, faced pressure, with several testing or undercutting recent buy points. Palantir Technologies notably fell 6.8% to $175.05, closing sharply below its 21-day line, its $188.20 buy point, and its 50-day line, despite reporting accelerating growth earlier in the week.

After-Hours Trading and Earnings

Following the market close on Thursday, Dow Jones futures, S&P 500 futures, and Nasdaq futures each rose slightly. Tesla shares edged higher in volatile extended trade after investors approved Musk’s pay deal with over 75% of votes in favor. The company also indicated it would examine next steps regarding significant support for authorizing the board to invest in xAI.

Several companies reported earnings after the market closed. Expedia saw a significant jump overnight, signaling a potential gap out of consolidation. Sandisk and Iren also rose slightly. Conversely, Applied Optoelectronics dived, and Take-Two Interactive fell sharply after delaying Grand Theft Auto VI. StoneCo declined from near a buy point, and Soundhound AI saw a modest decrease after recent sell-offs.

Broader Market Indicators

U.S. crude oil prices dipped 0.3% to $59.43 a barrel, while the 10-year Treasury yield sank six basis points to 4.09%. Among growth-focused exchange-traded funds, the Innovator IBD 50 ETF, ARK Innovation ETF, and ARK Genomics ETF all plunged between 4.6% and 5.5%, falling below their 50-day lines.

Investor Sentiment and Strategy

The stock market has experienced volatility this week, characterized by modest gains and sharp losses, with indexes reversing recent advances. While long-term winners generally remain stable, new stock purchases have largely struggled. Analysts suggest investors consider reducing market exposure, potentially by selling recent acquisitions and refraining from new positions, emphasizing a defensive strategy.