Major U.S. stock indices were mixed, while Tesla losses dragged down the S&P 500 and the Nasdaq’s performance.
U.S. stocks were mixed after President Trump’s budget bill passed the U.S. Senate. On Tuesday, June 1, Dow Jones was up 340 points or 0.77%. At the same time, the S&P 500 retreated from its record highs, losing 0.11%, while the tech-heavy Nasdaq Composite fell 0.61%
Traders were mostly focused on the progress with trade talks and Donald Trump’s massive budget bill, which passed the Senate. Senate members voted 51-50 on the bill, with Vice President JD Vance breaking the tie, setting the stage for the House vote.
The bill will provide trillions in tax cuts while lowering spending on Medicaid, food stamps, and clean energy. What is more, the bill would add an estimated $3.3 trillion to the nation’s deficit, which caused Republican Senators to vote against it. Fiscal conservatives Rand Paul, Susan Collins, and Thom Tillis were the three dissenters.
Musk reignites feud with Trump
At the same time, the bill’s cuts to clean energy and tax breaks to the fossil fuel industry brought the ire of tech billionaire Elon Musk. Musk, a former Trump ally, reignited his feud with the President, calling the bill “utterly insane and destructive.”
Notably, Musk was a major beneficiary of the U.S. subsidies to clean energy, especially to electric vehicles like those produced by his company, Tesla. In response to the criticism, Trump threatened to look into Musk’s lucrative contracts with the U.S. government, including those related to SpaceX, another of his firms.
At this point, traders seem to believe that Trump has all the cards, and some traders are concerned that the President can do significant damage to Tesla’s business. On market open, shares of Tesla fell almost 8%, from $320 to $295, subsequently recovering to $303.
