U.S. stock indices are recovering as Trump and Xi pledged to resume talks. On the other hand, Tesla took a beating on Musk’s spat with Trump.
U.S. stock indices modestly gained on Thursday, after positive developments in U.S.-China trade relations. The Dow Jones Industrial Average rose by 60 points, or 0.15%, while the S&P 500 gained 0.02%. The tech-heavy Nasdaq edged up just 0.01%.
Markets remained volatile as traders digested news that U.S. President Donald Trump and Chinese President Xi Jinping had a “very good phone call,” according to a post from Trump on social media. He noted that the two leaders had resolved several disagreements related to rare earth minerals — a key area of strategic trade interest.
Trump added that both countries plan to resume trade negotiations in person soon. Given that the U.S. and China are each other’s largest trading partners, developments in their relationship continue to exert a significant impact on both economies and global markets.
Tesla down after Musk’s break with Trump
Tesla shares dropped 7.89% on Thursday following a public fallout between CEO Elon Musk and President Trump. Musk, who formerly served as an advisor in Trump’s administration, harshly criticized the President’s latest budget proposal.
Trump responded by expressing “deep disappointment,” noting that Musk was aware of the budget details before issuing his criticism. Tesla had previously benefited from speculation that Musk’s relationship with the White House would lead to favorable policies. The stock soared after Trump’s election victory, with many expecting regulatory and funding advantages for Musk’s ventures.
Now, these hopes seem to be dashed, and Tesla went from its ATH of $479.86 in December to its current price of $303.99. Musk was a crucial Trump ally since the election, donating millions to his campaign. In the White House, Musk headed the unpopular Department of Government Efficiency until he stepped down on May 28.
