(Reuters) - Tesla shares rose 10% on Monday following reports the Trump administration is likely to exclude a set of sector-specific tariffs while applying reciprocal levies on April 2.

Traders also took advantage of the near 40% decline in the stock so far this year to buy into the EV maker.

The tariff optimism also set off a rally on Wall Street, with technology stocks leading the surge, pushing the three main U.S. indexes to two-week highs.

Tesla was on track to record its biggest one-day percentage jump since November 6 - when Trump won the U.S. presidential elections - if current gains hold.

The stock has had a turbulent run in the first quarter of the year, battered by rising competition, weak EV demand and worries around CEO Elon Musk's political involvement taking away focus from the business.

"Certain investors might feel all this bad news is fully priced in and it is now time to buy," said Dan Coatsworth, investment analyst at AJ Bell.

Last Thursday, Musk urged investors to "hold onto your stock" in a late-night Tesla "all hands" meeting that was livestreamed on Musk's social media platform X.

The EV maker' shares were the most actively traded stock by retail investors, with more than two buy orders for every sell order by 10:30 a.m. ET, according to J.P.Morgan data.