Chaos on Wall Street: Tesla's Stock Crashes amid Trump-Musk Warfare
Wall Street's downward spiral is being fueled by Trump and Musk's influence.
Amidst a heated grudge match between US President Donald Trump and Tesla CEO Elon Musk, the stock market was sent spiraling. Tesla's share value plummeted by a staggering 14%, resulting in a $150 billion market value loss. The company's unlucky day echoed across the broader market, pushing the Dow Jones Industrial Average, Nasdaq, and S&P 500 into negative territory.
The discouragement between Trump and Musk, initiated by the president's tax-and-spending bill critique, sent Tesla shares tumbling. Although the bill aims to phase out EV subsidies, some fear this could negatively impact the rapport between Tesla and the US government, potentially hindering valuable contracts and contracts for both Tesla and SpaceX.
In the midst of the US-China trade dispute unpredictability, investors are keeping their fingers crossed for a de-escalation. The recent phone call between Trump and Chinese President Xi Jinping sparked renewed hope, as both leaders reportedly agreed on a positive outcome for both countries. However, Jed Ellerbroek, a portfolio manager at Argent Capital Management, predicts that market fluctuations will remain unpredictable, emphasizing the importance of a resilient, adaptable portfolio in these uncertain times.
On a separate note, investors are eagerly awaiting the upcoming US jobs report for May. Although initial indications point to a slowing labor market, some analysts remain optimistic that the dip may prompt the US Federal Reserve to reconsider interest rate adjustments.
Meanwhile, shares for spirits manufacturer Brown-Forman plummeted over 17% following a bleak outlook, while fashion conglomerate PVH's stock took a 18% hit for its reduced second-quarter and full-year projections. On the bright side, mining companies Freeport-McMoRan and Southern Copper saw their stocks surge by over 2%.
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Elaborations:
The acrimonious exchange between Trump and Musk threatens to impose longstanding implications on Tesla's stock and overall market performance. As Tesla's market capitalization plummets by an accounting-shattering $380 billion since the start of the year, this tumultuous event has ought to be assessed diligently [1][2].
Contrary to the broader market's 20% growth over the same period, Tesla's stock has merely managed to eke out a 2.3% return [1]. Both Tesla and SpaceX stand to lose considerable government contracts should relations continue to sour [2][3], potentially curbing anticipated growth.
The disappearance of the $7,500 EV subsidy, proposed in Trump's tax-and-spending bill, looms as a significant concern, as transitions toward electric vehicles and autonomy could experience slowdowns due to policymaking uncertainty [2]. Investors remain vigilant for signs of moderation between Trump and Musk, as the hope for reconciliation might alleviate the current pressure [2][3].
Tesla approaches a monumental milestone with its robotaxi service launch scheduled for June 12, 2025. This critical event serves as a testament to Tesla's dedication to autonomous vehicles and AI and will likely serve as a pivotal catalyst for potential stock recovery, should the service prove successful [1].
- The ongoing tension between Trump and Musk has far-reaching implications for Tesla's stock and the broader market, necessitating careful analysis.
- The potential loss of government contracts for Tesla and SpaceX, due to the strained relationship between the US President and the CEO, could impact the company's growth and future economic prospects.
