Stocks Fall Led by Tesla on Trump-Musk Disagreement – US Market Wrap

Stocks fell alongside Treasuries as online arguments between Trump and Elon Musk brought Tesla down, dragging other megacap tech shares with it.

While equities recovered from their session lows, the Nasdaq 100 fell nearly 1%. Tesla shares fell 14% after Trump proposed ending Musk’s government contracts and subsidies. Space-related businesses soared. Earlier gains in equities were driven by hopes that tensions between the US and China would ease after Trump and Xi Jinping agreed to more trade talks.

Musk and Trump’s relationship deteriorated as the president retaliated against his former adviser for criticizing the Republican tax reform bill. The tone became more personal throughout the day.

On the eve of the all-important jobs report, an unexpected increase in unemployment claims fueled speculation that the Fed would have to resume rate cuts sooner rather than later to avoid a US recession.

Economists expect payrolls to increase by 125,000 after job growth in March and April exceeded expectations. That would leave the average over the last three months at a solid 162,000. The unemployment rate is expected to remain unchanged at 4.2%.