US stocks end down as Tesla slumps 14% on Trump-Musk feud
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Wall Street's stock indexes ended lower on Thursday in choppy trade as a slump in Tesla shares offset news of progress in tariff talks between U.S. President Donald Trump and Chinese leader Xi Jinping.Shares of electric car-maker Tesla dropped more than 14% in heavy trading as the public feud between CEO Elon Musk and Trump intensified. The stock has fallen four out of the last five sessions. The company lost about $150 billion in value after Trump and Musk began their verbal war.Musk has stepped up criticism of the president's massive tax legislation in recent days, while Trump alleged Musk was upsetbecause the bill takes away tax benefits for electric vehicle purchases."The fallout for Tesla stock is self-evident," said Mark Spiegel, portfolio manager at Stanphyl Capital."I see no meaningful fallout from this for the rest of the market, other than its slight effect on the indexes and index funds. The overall stock market has plenty of problems, but Tesla isn't one of them."Investors focused earlier on news that Trump and the Chinese leader had invited each other to their respective countries for visits as shown in U.S. and Chinese summaries of their phone call on Thursday.A recent dispute over critical minerals had threatened to tear up a fragile trade truce between the two biggest economies."Recent market moves are further indication that with economic policy shifts, and higher geopolitical and headline sensitivity, equity markets will be characterized by greater volatility and velocity than in the previous cycle," said Katherine Bordlemay, co-head of Americas client portfolio management for fundamental equities at GSAM.The Dow Jones Industrial Average fell 108.00 points, or 0.25%, to end at 42,319.74. The S&P 500 lost 31.51 points, or 0.53%, at 5,939.30 and the Nasdaq Composite dropped 162.04 points, or 0.83%, to 19,298.45.Weaker-than-expected U.S. private payrolls and services sector data on Wednesday raised concerns about an economic slowdown caused by trade uncertainties, with investors focusing squarely on Friday's nonfarm payrolls report. Initial jobless claims data on Thursday showed Americans filing new applications for unemployment benefits last week rose for a second straight week.Kansas City Federal Reserve Bank President Jeff Schmid on Thursday expressed concern that tariffs could rekindle inflation, saying upward price pressure could be apparent in coming months but not fully known for much longer.The comments show Schmid is likely inclined to hold the Fed policy rate steady at its June 17-18 meeting as is widely expected, but also beyond that.Despite calls from Trump to slash rates, Fed Chair Jerome Powell has opted to stand pat so far, awaiting further data to guide the policy decision as tariff volatility prevails.U.S. equities rallied sharply in May, with the S&P 500 index and the tech-heavy Nasdaq scoring their biggest monthly percentage gains since November 2023, thanks to a softening of Trump's harsh trade stance and upbeat earnings reports.Brown-Forman fell almost 18% after the Jack Daniel's maker forecast a decline in annual revenue and profit.Procter & Gamble said it will cut 7,000 jobs, or about 6% of its workforce, over the next two years in a restructuring. Shares of the consumer goods bellwether fell 1.9%.Volume on U.S. exchanges was relatively light, with 17.3 billion shares traded, compared to an average of 17.9 billion shares over the previous 20 sessions.Declining issues outnumbered advancers by a 1.11-to-1 ratio on the NYSE. There were 253 new highs and 49 new lows on the NYSE.On the Nasdaq, declining issues outnumbered advancers by a 1.48-to-1 ratio.The S&P 500 posted 16 new 52-week highs and three new lows while the Nasdaq Composite recorded 63 new highs and 42 new lows.
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