Although it always seemed inevitable, the worsening relationship between the world’s most powerful and richest men helped push United States stock indices lower on Thursday (Friday AEST).
The feud between U.S. President Donald Trump and his billionaire former adviser Elon Musk sent shares in electric vehicle maker (EV) and solar power group Tesla plunging, offsetting positive news on the trade front.
Tesla (NASDAQ: TSLA) slumped $47.37 or 14.27% to $284.68 in heavy trading as the public disagreement between its CEO Musk and Trump escalated.
The Dow Jones Industrial Average fell 108 points or 0.25%, to finish at 42,319.76, the S&P 500 declined 31.53 points or 0.5%, to 5,939.29, while the tech-heavy Nasdaq Composite shed 162.04 points or 0.8%, to close at 19,298.45.
No sooner had Musk left the White House he began to criticise Trump’s controversial budget legislation, prompting the President to claim the former head of the Department of Government Efficiency was angry at the removal of tax benefits for EVs.
“This massive, outrageous, pork-filled Congressional spending bill is a disgusting abomination. Shame on those who voted for it: you know you did wrong. You know it,” Musk wrote on his X social media site on Tuesday.
Trump responded by telling reporters Musk had not complained about the bill until he left the administration, adding: “I’m very disappointed in Elon. I’ve helped Elon a lot.”
The Tesla boss fired back on X (formerly Twitter): “Without me, Trump would have lost the election..”
Earlier, investors were cheered to hear Trump say his trade discussions with Chinese leader Xi Jinping by phone on Thursday had "a very positive conclusion" and that they would hold face-to-face talks in their respective countries.
The market has also been assessing signs of U.S. economic weakness such as figures on Thursday showing unemployment benefit applications rose unexpectedly last week and weaker-than-expected private payrolls and services sector data on Wednesday.
These figures have increased pressure, which has so far been resisted by Federal Reserve Chair Jerome Powell, on the U.S. central bank to continue cutting interest rates.
On the bond market, the 10-year Treasury yield rose 0.78% to 4.391%, while the two-year yield added 1.32% to 3.920%.
