Tesla stock rises as Trump-Musk feud cools and robotaxi launch nears

Euronews

a day ago

Tesla stock rose marginally in pre-market trading on Wednesday after CEO Elon Musk extended an olive branch to US President Donald Trump following their public feud.
Shares were up over 2% by around midday CEST, at $332.76 (€290.98)
'I regret some of my posts about President @realDonaldTrump last week. They went too far,' Musk said in a post on X on Wednesday.
After spending millions backing Trump's successful presidential bid, Musk heavily criticised the Republicans' new tax and spending bill, creating a rift between the two men.
Musk was previously appointed by Trump to lead DOGE, the US' Department of Government Efficiency. The tech billionaire argued that the new bill, dubbed by Trump as the 'One Big Beautiful Bill Act', would irresponsibly raise the public deficit and undermine DOGE's work. Musk resigned from the department in late May after saying he was 'disappointed' with spending proposals.
In an escalation of the conflict last week, Musk called for Trump to be impeached and replaced with Vice President JD Vance. He also implied that Trump was linked with late sex offender Jeffrey Epstein, an allegation the White House denied.
As for the president, Trump threatened to terminate government contracts awarded to Musk's SpaceX firm.
On Monday, the president then took a more conciliatory tone. Trump said he wished Musk 'very well' and claimed that he would retain Starlink internet service at the White House. Even so, the US President suggested that he might remove his own Tesla from White House grounds.
The value of Tesla shares have been rocked by volatility as investors track the dramas playing out in Washington — and some dump stock in protest of Musk's politics.
Both Argus Research and Baird downgraded ratings for Tesla stock on Monday, which has seen its value drop by more than 19% since the start of the year.
Aside from the Trump-Musk feud, experts noted that risks to Tesla include the expiration of EV credits, which could dampen demand. A $7,500 tax credit for an EV purchase is set to be fully eliminated by the end of 2026, although restrictions will be applied before this.
For those wishing to use the credit in 2026, they can only buy from manufacturers that haven't yet sold 200,000 EVs. This would disqualify Tesla.
Other challenges include increased competition in the EV market, particularly from Chinese rivals such as BYD.
Despite these storm clouds ahead, Musk's enthusiasm about robotaxis appears to be inflating the stock's value. The CEO is currently hoping to roll out the self-driving taxi service in Austin, Texas, on 22 June.
In a post on his X social media platform, Musk said the date could change because Tesla is 'being super paranoid about safety'.
Remember negative interest rates? Back in early 2020, as the world grappled with the COVID-19 pandemic, central banks across advanced economies rushed to slash interest rates, offering cheaper borrowing to cushion the economic blow alongside unprecedented fiscal support.
In many countries, rates tumbled to near or even below zero — an extraordinary policy shift reflecting the urgency of avoiding a prolonged recession.
Fast forward five years, and no major economy currently operates with rates at or below zero. But Switzerland could soon change that.
Switzerland could soon become the first advanced economy to re-enter the era of negative interest rates.
A confluence of weakening price pressures and a subdued economic outlook has sparked growing expectations that the Swiss National Bank (SNB) will resume ultra-loose monetary policy, potentially cutting interest rates below zero in the coming months.
Last week, the Swiss Federal Statistical Office reported that consumer prices fell by 0.1% in May 2025 compared to a year earlier, marking the first deflationary print since March 2021. The decline was broad-based, with notable year-on-year contractions in transport costs (-3.7%), food and non-alcoholic beverages (-0.3%), healthcare (-0.2%), and household goods and services (-2.6%).
While a modest bout of deflation is not in itself alarming, it underscores the fragility of domestic demand and presents a challenge for the SNB's inflation target. The central bank defines price stability as annual inflation between 0% and 2%.
"Swiss inflation could remain close to 0%, which represents the lower end of the SNB's price stability range," said Niklas Garnadt, economist at Goldman Sachs.
The expert identified declining inflation expectations, falling energy prices, and potential trade frictions as downside pressures on the price outlook going forward.
The SNB, which currently holds its policy rate at 0.25%, meets on 19 June, and economists are expecting another rate cut of 25 basis points.
According to Goldman Sachs' base case, the SNB will lower its policy rate to -0.25% by September, in two successive cuts.
Yet, there is a 40% chance, the bank noted, that policymakers may opt for more aggressive easing, with two 50 basis point cuts taking the rate back to -0.75% — the lowest in its history.
Although the SNB also has foreign exchange operations at its disposal, economists expect interest rate cuts to take precedence in the near term.
There are some reasons for this preference, according to Goldman Sachs.
"The SNB has prior experience managing the impact of negative rates," Garnadt said.
Moreover, domestic inflation is more responsive to interest rates than currency movements.
And finally, Switzerland remains on the US Treasury's watchlist for currency manipulation, potentially constraining foreign-exchange intervention activity.
That said, foreign exchange interventions have not been ruled out entirely. During the post-2008 low-inflation years, the SNB frequently bought foreign currency to stem franc appreciation.
The SNB is again navigating familiar territory, balancing the need to support inflation against the risks of overreliance on unconventional measures.
While Switzerland's economic fundamentals remain relatively strong, the renewed threat of deflation could push the central bank to breach interest-rate lower bounds again.