US stocks slump as Tesla shares tank on Trump-Musk row

WASHINGTON – Wall Street stocks tumbled on June 5 as a row between US President Donald Trump and Tesla boss Elon Musk erupted – with the electric vehicle firm’s share price tumbling around 14 per cent.

The Dow Jones Industrial Average slumped 0.3 per cent to 42,319.74 and the broad-based S&P 500 Index lost 0.5 per cent to 5,939.30.

The tech-heavy Nasdaq Composite Index fell 0.8 per cent to 19,298.45.

The relationship between Mr Trump and Mr Musk imploded in public view, with the US president expressing disappointment with his billionaire former aide’s criticisms.

Mr Musk, who had slammed the Republican president’s proposed massive spending Bill, hit back in real time on social media.

Tesla shares plunged by more than 14 per cent, losing over US$100 billion (S$130 billion) in market capitalisation, as Mr Trump said he had asked “crazy” Mr Musk to leave his administration.

He also threatened to take away the tech tycoon’s government contracts.

Mr Patrick O’Hare of Briefing.com said Tesla had weighed “heavily on the broader market,” particularly the consumer discretionary sector.

“But all in all, the market itself is holding up reasonably well, given the scope of that decline,” he added.

Investors also digested the outcome of a long-awaited phone call between Mr Trump and Chinese President Xi Jinping, looking for signs that both leaders could open doors to a longer-lasting truce in trade tensions.

“There were no new negative developments,” Mr O’Hare said, adding that markets appreciated the mutual approach of allowing more time to work things out.

Looking ahead, investors will be eyeing official employment data due June 6, to gauge the health of the US economy as Mr Trump’s tariffs ripple through various sectors. AFP

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