Good morning. What began as a calm day on Wall Street turned turbulent by the afternoon, as a very public spat between President Trump and Elon Musk sent shares of Tesla spiraling. The S&P 500 and Nasdaq both reversed earlier gains, weighed down by Tesla’s steep selloff and broader uncertainty around the GOP tax bill, EV subsidies, and trade policy. Trump’s threat to cancel Tesla contracts hit a market already on edge ahead of Friday’s key payrolls report.

Earlier in the day, equity markets had responded positively to news of a “constructive” phone call between Presidents Trump and Xi. That optimism faded as the Musk-Trump feud escalated, overshadowing potential progress on trade. Meanwhile, economic data painted a mixed picture, with jobless claims hitting 8-month highs, productivity revised sharply lower, and the trade deficit narrowing dramatically on collapsing imports.

U.S. Foreign Investment Tax Could Do More Damage Than Tariffs
The Economist warns that Washington’s new tax on foreign investors could backfire more than tariffs. By pushing away capital, it risks undermining U.S. financial markets and global economic leadership.
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Trump-Musk Feud Erupts Over GOP Spending Bill
The Wall Street Journal details a dramatic political fallout between Elon Musk and Donald Trump. After Musk criticized the GOP’s new tax bill, Trump lashed out with threats to pull Tesla’s government contracts—sparking a double-digit decline in TSLA shares.
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High Stakes in the Musk–Trump Showdown
A follow-up WSJ piece explores how the increasingly personal rift between Musk and Trump could alter the political landscape, potentially fracturing GOP support and shaking investor confidence in clean energy markets.
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Can the May Jobs Report Confirm Labor Market Cracks?
MarketWatch previews Friday’s payrolls report, noting that rising jobless claims and weak ADP data have sparked concern that hiring may be slowing under the weight of trade uncertainty and corporate belt-tightening.
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Mortgage Rates Decline for First Time in Weeks
MarketWatch highlights a drop in mortgage rates, opening a potential window for homebuyers amid still-tight supply. But rising inventory and high prices remain obstacles for many.
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Tesla Reels, Recovers Slightly After Trump Threats
CNBC covers Tesla’s volatile session, noting the stock dropped as much as 18% before trimming losses. Trump’s threats to cancel contracts sent shockwaves through clean energy names.
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Xi Bets on Trump Thaw to Win on Chips, Tariffs
Bloomberg reports that Chinese President Xi is optimistic that a Trump-led thaw in relations will deliver wins on technology access and tariff relief. A phone call this week may have laid the groundwork.
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U.S. equities stumbled Wednesday after a volatile session. Stocks traded higher through much of the day before an afternoon collapse in Tesla dragged the indexes lower. The S&P 500 and Nasdaq reversed earlier gains as TSLA fell more than 15% intraday, hit by escalating public conflict between Elon Musk and President Trump over subsidies and tax policy.

Trump, responding to Musk’s attacks on the GOP tax bill, threatened to cancel federal contracts and accused Musk of “just wanting EV handouts.” Musk fired back on X, claiming Trump “would have lost” without him. The clash rattled clean energy names and dominated headlines. Meanwhile, earlier optimism around Trump’s call with Xi faded. The two leaders reportedly discussed trade and agreed to resume negotiations, with rare earths among the topics covered.

Economic data showed a sharp drop in imports, driving the April trade deficit to its lowest level since 2023—a 55% month-over-month improvement. While this may boost Q2 GDP, underlying trends suggest a weakening trade environment. Jobless claims hit a new 8-month high at 247,000, and labor cost data showed Q1 productivity revised down to -1.5%, the worst since Q2 2022.

In markets, gold declined 0.71% to $3,375.10, while silver surged to a 13-year high at $35.81. Oil prices rose on renewed trade optimism, with WTI settling at $63.37. Bitcoin extended its recent pullback, dropping 2.5% to just below $102,000. The dollar index recovered from early losses to close near 98.80.

With sentiment data slipping and the labor market flashing mixed signals, Friday’s jobs report could prove pivotal. Equity markets remain sensitive to political risk—especially as Trump’s policy shifts, foreign investor taxes, and high-profile feuds create new uncertainty. As volatility rises, we’ll be watching yields, wage inflation, and positioning across tech and energy for clues to what comes next.