Tesla stock down 17% as Musk-Trump breakup worries Wall Street

Musk and Trump go back and forth with criticism on social media.
TSLA dives as much as 17% on Thursday.

Clay Webster FXStreet

Tesla (TSLA) stock is facing one of its worst trading sessions in a long time on Thursday. Shared closed above $332 on Wednesday, but at the time of writing late in the afternoon session, TSLA has traded below $274, suffering a 17% sell-off.

The poor sentiment has only grown as CEO Elon Musk's public spat with US President Donald Trump has worried the market.

Musk began the week criticizing Trump's "big, beautiful bill" for adding to the US deficit, and he now says that he might primary Republicans who support the President's budget bill. It appears that Musk, who only left the administration last week, is angry that Trump's new budget bill doesn't include much of his cuts made via the Department of Government Efficiency (DOGE).

Musk gave an interview to CBS' David Pogue earlier this week in which he said a budget could be "big or beautiful, but not both."

Trump responded on Thursday by saying he threw Musk out of his administration because the latter was incensed by Trump ending electric vehicle (EV) subsidies. Trump added later in the afternoon that he might cut Musk's contracts with the government. Trump's SpaceX has major dealings with NASA, and Starlink also has several lucrative contracts with the government. The State Department paused an earlier $400 million contract with Tesla in February, and it's not clear whether that contract is even on the table anymore.

Trump Truth Social posts from Thursday, June 5, 2025

Tesla stock has fallen as low as $273.21 in the run-up to the close on Thursday. Breaking below the 50-day Simple Moving Average (SMA), Tesla's next support level would be $265.00, former resistance from $224.

Tesla's sell-off has dragged down the tech-heavy NASDAQ Composite, which moved from a moderate advance in the morning to as much as a 1% decline on Thursday afternoon.

TSLA daily stock chart

Author

Clay Webster

FXStreet

Clay Webster grew up in the US outside Buffalo, New York and Lancaster, Pennsylvania. He began investing after college following the 2008 financial crisis.

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