Tesla shares sank 13%, weighing on the Nasdaq Composite, as a spat broke out between its boss Elon Musk and US President Donald Trump over their opposing views on the White House’s big and beautiful tax and spending bill.
Meanwhile, Trump was upbeat after his 90-minute phone call with Chinese President Xi Jinping, with trade talks set to resume, allaying some fears among investors and pushing down the price of gold – the favoured place for people to turn to when things get a little uncertain.
The European Central Bank cut its benchmark rate by a quarter-point as expected, although president Christine Lagarde surprised some in the market saying it might be the end of the easing cycle.
And initial public offerings might be back on the radar after stablecoin issuer Circle Internet surged on debut, and the New York Stock Exchange’s president Lynn Martin said there’s plenty of demand for firms to go public.
Not the man I used to be
Shares of Tesla tumbled as the previously tightknit relationship between US President Donald Trump and Elon Musk deteriorated over their differing views on the White House’s spending and tax plans.
Trump responded to Musk’s criticisms of the ballooning deficit, saying he was disappointed with Telsa’s chief – who’d been a key figure in the administration’s early days – and that the stripping of electric vehicle subsidies was at the heart of the dispute, something Musk disputed.
Tesla’s slump weighed on the Nasdaq, which was down 0.3% in late trading, while the Dow Jones Industrial Average edged up 0.1% as investors were buoyed by Trump’s call with Chinese President Xi Jinping, which thawed the frosty relations between the two superpowers.
Trade talks are set to resume, and the leaders agreed to reciprocal visits. Gold futures prices were down 0.6% at US$3,377 as nervous investors wound back their exposure to their traditional haven in heightened uncertainty.
“US equities have traded both up and down for the day and are currently little changed with an hour left of trading,” Bank of New Zealand senior market strategist Jason Wong said in a note. “Of note, President Trump and Elon Musk have been trading barbs – the bromance is well and truly over – and this has been reflected in Tesla’s share price falling over 10%.”
Focus will shift to US jobs figures on Friday in New York, with economists picking the world’s biggest economy added 125,000 jobs in May with the unemployment rate steady at 4.2%.
This is the end?
Across the Atlantic, the European Central Bank cut its benchmark rate 25 basis points to 2% as expected, although president Christine Lagarde said policy was well-positioned and may be near the end of the cycle.
The kiwi dollar traded at 52.79 euro cents at 7am in Auckland from 52.86 cents yesterday, and was little changed at 60.40 US cents from 60.32 cents.
Stock markets in Europe were mixed with the UK’s FTSE 100 index up 0.1% and Germany’s DAX 30 gaining 0.2%, while France’s CAC 40 slipped 0.2%.
And initial public offerings got a boost, with stablecoin issuer Circle Internet more than doubling in their debut from the US$31 offer price.
NYSE president Lynn Martin said public markets were ready for a revival even in the uncertain environment, with growing investor demand.
Australia’s ASX is eyeing the return of Virgin Australia after fund managers reported backed a A$685 million raising, while communities developer GemLife is said to be preparing to list next month.
Reporting by Paul McBeth. Image from Paul Steuber on Unsplash.
