US stocks slip on Musk row
NEW YORK: Wall Street closed lower Thursday as a spat between President Donald Trump and his billionaire former aide Elon Musk spilled into the public eye, but global markets were mixed while investors assessed trade talks between Washington and Beijing.
Major US indexes fell, with shares in Musk's electric vehicle company Tesla tanking more than 14 percent as the US leader threatened to tear up the tycoon's government contracts.
Trump expressed disappointment Thursday with his top donor's criticisms of a 'big, beautiful' spending bill before Congress, prompting Musk to hit back in real time.
But markets were 'holding up reasonably well' otherwise, said Patrick O'Hare of Briefing.com.
Earlier Thursday, Trump and Chinese President Xi Jinping held a long-awaited call focused almost entirely on trade.
'The call lasted approximately one and a half hours, and resulted in a very positive conclusion for both Countries,' Trump said on his Truth Social platform. He added that US and Chinese teams would hold a new meeting 'shortly.'
The market 'initially took a positive view of that call,' O'Hare said. This was 'largely because it seemed that the tone of the call was more conciliatory than combative.'
Previously, the world's two biggest economies blamed each other for jeopardizing a temporary truce in their escalating tariffs war.
City Index and FOREX.com analyst Fawad Razaqzada said markets hoped the direct line between Washington and Beijing could ease trade tensions, even if momentarily.
But he added: 'It is super important that the Trump-Xi call now leads to some concrete movement.'
Since his return to the White House, Trump has launched wide-ranging tariffs including a 10 percent levy on most US trading partners, while subjecting goods from China to elevated rates.
- Euro boost -
Meanwhile, the euro got a boost from the European Central Bank signaling an end to its rate-cut cycle.
European stock markets closed mixed even though the ECB cut its key deposit rate a quarter point to two percent, as expected.
It was its eighth reduction since June last year when it began lowering borrowing costs.
But ECB President Christine Lagarde stated the central bank is 'getting to the end' of the rate-cutting cycle.
That sent the euro surging against the dollar and European stocks gave up earlier gains.
The ECB's series of cuts stands in contrast to the US Federal Reserve, which has kept rates on hold recently amid fears that Trump's levies could stoke inflation in the world's top economy.
Investors are now looking to the release on Friday of US payrolls data, which could have a bearing on monetary policy.
Other data has been mixed. April jobs openings data beat expectations but according to payroll firm ADP, private sector jobs rose by only 37,000 last month, slowing from April.
Another survey showed activity in the US services sector contracted in May for the first time since June last year.
The readings stoked concerns that the US economy was stuttering.
The readings ramped up bets on a Fed cut, with markets pricing in two by the end of the year, starting in September.
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