Trump–Musk Feud Jolts Markets as Tesla Shares Plunge, Then Rebound
Trump–Musk Feud Jolts Markets as Tesla Shares Plunge, Then Rebound
By:JJ Kinahan
Jobs report beats forecast, but tariff worries slam stocks
- Trump-Musk feud shakes markets; Tesla tumbles and rebounds slightly.
- Job growth remains steady, but past months’ figures have been revised downward significantly.
- Fear of tariff fears have hit earnings, and share prices have fallen for Lululemon, DocuSign and Broadcom.
Markets were relatively subdued yesterday, with the S&P 500 down 0.5% and the Nasdaq Composite slipping 0.8%. Small-cap stocks remained flat, while the Dow Jones Industrial Average declined by 0.25%. Despite the modest moves, investors are eyeing a potential push toward the 6,000 level, buoyed by this morning’s employment data.
Economists expected 130,000 new jobs and an unemployment rate of 4.2%, according to Bloomberg. But the actual numbers exceeded forecasts slightly, with 139,000 jobs added and unemployment holding steady at 4.2%.
However, revisions to previous months’ data softened the good news. March and April job figures were revised down by a combined 95,000, casting a shadow over the latest gain.
Mixed earnings reports
Earnings season continues to deliver mixed results. Lululemon (LULU) issued a warning about tariff-related headwinds following its earnings release, sending its shares more than 20% lower in premarket trading.
Broadcom (AVGO) also fell nearly 3% despite beating earnings expectations. The company’s forward guidance matched analyst estimates, but the market had hoped for more bullish projections.
Meanwhile, DocuSign (DOCU) shares plummeted 20% in premarket after the company reported billings growth below forecasts, raising concerns about demand and future revenue.
The Trump-Musk feud
Adding to market jitters is an ongoing public spat between President Trump and Elon Musk. The disagreement, reportedly centered around economic policy and EV tax credits, has caught investors’ attention.
On Thursday, Tesla shares dropped 14% in response to the tension. However, a planned call between Musk and White House officials appears to be calming nerves, with Tesla shares rebounding 4% in premarket trading.
Volatility eases
Market volatility, as measured by the VIX, continues to trend lower. Following today’s employment numbers, the VIX is now below 17.5, nearing its long-term average of 16 — a level seen as a sign of market stability.
Meanwhile, bond markets are showing signs of strain. Yields on the 10-year Treasury have risen to 4.44%, while 30-year yields are hovering at 4.93%. These higher yields are tempering expectations for any imminent cuts in interest rates from the Federal Reserve.
In the face of these developments — earnings surprises, economic data and political headlines — it’s important to stay focused on long-term investing goals. Volatility may continue in the short term, but disciplined strategies tend to outperform reactive moves over time.
JJ Kinahan is CEO of tastytrade from IG—which includes tastylive, tastyfx and tastycrypto. Kinahan traded for 21 years at the Chicago Board Options Exchange. He serves on the CBOE Advisory Board and the SIFMA Options Committee. @thejjkinahan
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