Wall Street Slips as Tesla Tumbles Amid Musk-Trump Clash
U.S. stock indexes closed lower on Thursday, weighed down by volatile trading and a steep drop in Tesla shares. Investor enthusiasm over a diplomatic overture between President Donald Trump and Chinese leader Xi Jinping was overshadowed by the electric carmaker's sharp decline.
Tesla's Tailspin Continues
Shares of Tesla plunged over 14% following a public escalation in the feud between CEO Elon Musk and President Trump. The verbal spat rattled markets, with Tesla's stock posting losses in four of the last five sessions. Since tensions flared, the company's market value has plummeted by around $150 billion.
Diplomatic Signals Offer Little Relief
Earlier in the day, investors reacted positively to reports of a phone call between Trump and Xi, during which both leaders extended invitations to visit each other's countries. The gesture sparked hope for improved relations between the two largest economies.
Still, unresolved disputes over key mineral resources threaten to disrupt the fragile trade truce. The renewed friction casts a shadow over recent signs of cooperation between Washington and Beijing.
Wall Street Cools Off Amid Weak Data and Inflation Concerns
After a strong rally in May, U.S. markets stumbled again on Thursday, dragged down by disappointing economic reports and renewed worries over inflationary risks.
Key Indexes Closed Lower:
- Dow Jones dropped 108.00 points (–0.25%) to 42,319.74
- S&P 500 fell 31.51 points (–0.53%) to 5,939.30
- Nasdaq Composite lost 162.04 points (–0.83%) to 19,298.45
Disappointing Jobs Data Fuels Uncertainty
Midweek reports revealed weaker-than-expected employment figures in the private and service sectors, prompting fresh concerns about an economic slowdown. With trade tensions still unresolved, investors are now eyeing Friday's nonfarm payrolls report for clearer signals on the health of the U.S. economy.
Fed Official Warns of Inflation Comeback
Kansas City Federal Reserve President Jeff Schmid raised a red flag on Thursday, warning that tariffs could reignite inflationary pressures. He noted that rising prices might start to show in the coming months, although the full impact could take time to emerge.
His remarks suggest the Fed is likely to hold interest rates steady at its June 17–18 policy meeting, and possibly beyond, as it monitors evolving economic conditions.
May's Surge Still Echoes
Despite Thursday's pullback, May was a standout month for U.S. equities. The S&P 500 and Nasdaq saw their strongest monthly percentage gains since November 2023, thanks to softening trade rhetoric from Trump and upbeat corporate earnings reports.
Jack Daniel's Faces a Hangover: Markets Rattle as Corporate Storm Clouds Gather
Global markets were rattled on Friday by weak earnings forecasts, looming job cuts, and mounting trade uncertainty, leaving investors to navigate a sea of caution.
Brown-Forman Stumbles on Grim Outlook
Shares of Brown-Forman, the company behind Jack Daniel's whiskey, tumbled nearly 18% after it issued a downbeat forecast for full-year revenue and profit. Slowing international sales and mounting production costs have cast a shadow over the company's financial trajectory.
Procter & Gamble Plans Massive Job Cuts
In another corporate shake-up, Procter & Gamble announced plans to cut 7,000 jobs—roughly 6% of its workforce—over the next two years. The layoffs are part of a broad restructuring effort aimed at streamlining operations. The announcement dragged P&G shares down by 1.9%.
European Markets Hold Steady Before U.S. Jobs Data
European stocks traded flat on Friday morning, with the STOXX 600 index holding at 551.95 points as of 08:09 GMT. If momentum holds, the index is on track for its second consecutive weekly gain. Still, traders are staying cautious ahead of critical U.S. employment figures.
Labor Market in Focus Amid Trade Tensions
All eyes are on the U.S. nonfarm payrolls report, expected later in the day. Investors are watching closely to gauge the impact of President Donald Trump's economic policies—especially his doubling of tariffs on steel and aluminum—on the labor market, and how the Federal Reserve may react in an increasingly uncertain global landscape.
Hope on the Horizon?
Despite rising trade friction, investor sentiment found a glimmer of hope after Thursday's phone conversation between Trump and Chinese President Xi Jinping. The tone of the dialogue sparked optimism that a potential de-escalation of the tariff war might still be possible.
Musk vs. Trump: A Clash with Market Implications
Meanwhile, the public feud between Elon Musk and President Trump continues to unfold, raising questions about whether this high-profile standoff could have wider repercussions for the stock market as a whole.
Market Moves Mixed: Healthcare and Energy Rise, While Retail and Tech Drag
European markets closed the week with a fragmented performance as defensive sectors held firm, while others succumbed to corporate downgrades and underwhelming economic data.
Healthcare and Energy Resist the Downtrend
Stocks in the healthcare and energy sectors provided some cushion amid broader weakness, offering investors safe havens during a session marked by caution and selective risk-taking.
Retail Loses Ground After Lululemon Cut
Shares of Adidas dropped 0.6%, while Puma slipped 1.4% after U.S. athletic apparel company Lululemon Athletica slashed its annual profit outlook. The ripple effect quickly reached European competitors, reflecting broader concerns about consumer spending.
Dassault Delays Growth Targets
French software firm Dassault Systemes shed 1.5% after announcing a one-year delay in meeting its mid-term earnings per share target. The move was viewed as a sign of caution, and investors responded accordingly.
Renk Plunges After Rating Downgrade
Renk was among the worst performers in the STOXX 600, dropping about 5% following a downgrade from Exane BNP Paribas, which shifted its outlook from "neutral" to "underperform." The revision weighed heavily on the defense-sector manufacturer.
Economic Signals Disappoint: Germany and UK in Focus
April's economic figures for Germany revealed a sharper-than-expected decline in exports and industrial output, as demand from the U.S. weakened following months of pre-tariff stockpiling.
Meanwhile, in the UK, housing prices fell more than anticipated in May, adding to signs of strain in the British consumer market and casting doubts on the strength of the real estate sector.
