Stocks Slide as Musk-Trump Feud Escalates, Tesla Plunges

U.S. stocks closed broadly lower Thursday as a sharp selloff in Tesla shares weighed on the broader market and a high-profile clash between tech billionaire Elon Musk and President Donald Trump rattled investors. Growing uncertainty over U.S.-China trade relations and a looming jobs report added to the cautious mood.

The Dow Jones Industrial Average fell 108 points, or 0.25%, to finish at 42,319.70. The S&P 500 lost 31.50 points, or 0.53%, to close at 5,939.31, while the Nasdaq Composite tumbled 162.04 points, or 0.83%, to end at 19,298.40. The Russell 2000 index edged up 0.05% to 208.54.

Leading the declines was Tesla Inc. (TSLA), which plunged more than 14%, or $48, to close at $284.70—its worst single-day performance since March. The selloff followed a highly public and increasingly personal exchange between CEO Elon Musk and President Trump that erupted on social media.

Musk took to X (formerly Twitter) early Thursday to denounce Trump’s new tax initiative, calling it “The Big Ugly Bill” and warning, “The Big Ugly Bill will INCREASE the deficit to $2.5 trillion!” He also wrote, “Without me, Trump would have lost the election, Dems would control the House and the Republicans would be 51-49 in the Senate.”

In response, President Trump, speaking during an Oval Office meeting with German Chancellor Friedrich Merz, said: “I’m very disappointed in Elon. I’ve helped Elon a lot. He said the most beautiful things about me, and he hasn’t said bad about me personally, but I’m sure that’ll be next.” Later on Truth Social, Trump added, “Elon was wearing thin... I took away his EV Mandate... and he just went CRAZY!”

The tension escalated sharply late Thursday afternoon when Musk posted, “Time to drop the really big bomb. @realDonaldTrump is in the Epstein files. That is the real reason they have not been made public. Have a nice day, DJT.” The unverified accusation sent shockwaves through markets and amplified Tesla’s intraday losses.

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Meanwhile, investors digested cautious optimism from President Trump regarding U.S.-China trade negotiations. The president said he had a “very good phone call” with Chinese President Xi Jinping and discussed the countries’ newly agreed trade deal. “There should no longer be any questions respecting the complexity of Rare Earth products,” Trump posted. A high-level meeting is planned, involving U.S. Treasury Secretary Scott Bessent and Commerce Secretary Howard Lutnick.

Markets were also positioning ahead of Friday morning’s May jobs report. Economists expect the Labor Department to report a slowdown in hiring, with payroll growth forecast at 125,000 to 130,000 jobs, down from 177,000 in April. The unemployment rate is projected to rise to 4.3%, while average hourly earnings are seen increasing 0.3% month-over-month.

Recent data show signs of labor market cooling. Weekly jobless claims rose to 247,000, the highest since October 2024. ADP reported just 37,000 private-sector jobs added in May, and ISM data continued to reflect sluggish employment trends in both manufacturing and services.

While not expected to prompt an immediate Fed response, the jobs report could reshape investor expectations for the second half of the year, especially if wage growth outpaces job creation. Analysts will be watching for signs of deeper labor market cracks as federal job cuts and tariff pressures mount.

The market, already sensitive to political risk and global trade volatility, now faces the added weight of a deepening rift between one of the world’s most influential CEOs and the sitting U.S. president—at a moment of economic fragility and global transition.