Stocks soared Thursday after the Federal Reserve cut interest rates by 50 basis points the day before. One of the biggest winners was Tesla (NASDAQ: TSLA). Shares jumped 7.4% as investors saw the rate cuts as a clear tailwind for the U.S.'s largest electric vehicle (EV) maker. That gain was enough to add $50 billion to its market cap.

Shares of auto leaders Tesla (NASDAQ: TSLA) and Toyota Motor (NYSE: TM), as well as auto-centered semiconductor stock Indie Semiconductor (NASDAQ: INDI) were rallying on Thursday, up 7.3%, 4.3%, and 3.5%, respectively, as of 2:14 p.m. ET.

Higher interest rates have been proved to be a headwind for the auto industry at large, and Tesla is no exception.

Shares of electric-vehicle maker Tesla tend to be more volatile the day after a Federal Reserve interest-rate decision than on the day itself.

A jumbo rate cut fed hopes for the auto industry. The post Why the Tesla share price just rallied appeared first on The Motley Fool Australia.