US stock markets declined sharply on Thursday, driven by a fierce public dispute between President Donald Trump and Tesla CEO Elon Musk.
The Dow Jones Industrial Average dropped nearly 0.3%, the S&P 500 fell over 0.5%, and the Nasdaq Composite lost more than 0.8%. Tesla’s shares plunged 14%, wiping out about $150 billion in market value, marking one of the company’s steepest single-day declines in recent years.
The conflict escalated after Musk criticized Trump’s large tax-and-spending bill, calling it a “disgusting abomination” on social media. In response, Trump suggested cutting government subsidies and contracts to Musk’s companies, including SpaceX, which holds billions in federal contracts.
Trump posted on Truth Social that ending these subsidies would save “billions and billions of dollars.” Musk defiantly replied, “Go ahead, make my day,” intensifying the public spat.
This fallout has unsettled investors, who fear the feud could lead to tougher regulatory scrutiny for Tesla.
Analysts noted the rift is a sharp departure from the previously cooperative relationship between Musk and the Trump administration, which many had expected to favor Tesla’s growth. The dispute also raises concerns about Musk’s focus on Tesla amid his broader business and political engagements.
Earlier Thursday, Trump confirmed a 90-minute phone call with Chinese President Xi Jinping, which was described as “very positive” and raised hopes of easing US-China tensions.
However, this optimism was overshadowed by the Trump-Musk clash and weak labor market data showing rising unemployment claims, signaling a slowing US economy. Investors are now awaiting Friday’s May jobs report for further insight into the labor market’s health.
In other market news, shares of stablecoin firm Circle surged on its market debut, providing a rare bright spot amid the turbulent trading day.
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