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.

AUD/USD rises to 0.6950 as USD slips on Fed's Warsh

AUD/USD regains traction and extends the bounce toward 0.6950 in the Asian session on Friday. Fed Chair Warsh's comments reinforce the selling pressure on the US Dollar, allowing the pair to stretch higher. Warsh said that he remains committed to delivering price stability without giving away anything on future interest rate path.

USD/JPY falls in symc with USD, gives up 158.00 after Warsh's speech

USD/JPY has come under fresh selling pressure and gives up 158.00 in the Asian session on Friday amid the emergence of fresh US Dollar selling. Fed Chair Warsh's non-committal commentary on the future tightening path, weighs on the US Dollar and the pair.

Gold adds to Thursday's gains as softer bond yields drag USD to over one-week low

Gold attracts buyers for the second straight day on Friday amid a broadly weaker US Dollar, though it remains confined in a two-week-old range. The USD Index (DXY), which tracks the Greenback against a basket of currencies, fell to a nearly two-week low as Federal Reserve Chair Kevin Warsh’s remarks at the Annual IMF and World Bank Group Meetings did little to alter the rate outlook.

Busy week for Ripple’s RLUSD: What changes for stablecoin holders?

Ripple’s RLUSD is gaining ground across institutional finance, with a major bank launching custody services, a new wallet integration making it easier for developers to build payments and agentic experiences on the network, and a brokerage platform planning to use the stablecoin for settlement.

Hot inflation, falling yields: A new test for global markets

Global markets are confronting a difficult combination: renewed inflation pressure, expensive capital and growing scrutiny of the investment supporting the AI boom. The most revealing development this week was the demand for government bonds even as US inflation accelerated. My assessment is that investors should treat this as a test of financing resilience.

Everyone's dumping Gold after hot US inflation. Here's why $4,100 could be a floor, not a cliff

Gold (XAU/USD) is recovering from a sharp sell-off triggered by hotter-than-expected United States (US) inflation data released on Wednesday. The precious metal briefly plunged toward $4,073 as investors increased their bets on further Federal Reserve (Fed) interest rate hikes before recovering as US Treasury yields and the US Dollar (USD) reversed their initial gains.