Trump vs Tesla: The tweet that sank the stock
Throughout Thursday, the market was caught in a whirlwind of contradictory headlines that kept investors on edge. The first knock came from the labour market: data showed initial jobless claims rose to 247,000 – worse than the forecast of 236,000 and higher than last week’s 240,000. That alone was enough to sour sentiment and nudge the main indexes into negative territory from the opening bell.
But it didn’t take long for the mood to shift. Just 30 minutes into the session came news of a phone call between U.S. President Donald Trump and China’s President Xi Jinping. This upbeat development sent a jolt through the market – investors jumped in, buying across the board and lifting the indexes into the green. At the height of the surge, the S&P 500 even touched 5999.70, coming within a whisker of the 6000-point milestone. Still, it could not break through, and soon turned back.
Then came a fresh wave of turmoil – again featuring President Trump. A highly publicised spat erupted between him and Elon Musk, with both trading accusations in the media. And where Musk goes, Tesla follows: the carmaker’s shares quickly came under heavy pressure from the bears, ending the day down nearly 15%.
As for the broader market – it was all downhill from there. A slow but steady sell-off dragged indexes lower throughout the afternoon. By the close, the Dow Jones (DJIA-30) had lost 0.25%, the tech-heavy NASDAQ Composite fell 0.83%, and the S&P 500 slipped by 0.53%.
The retreat swept across nearly every economic sector. Only four of the eleven managed to stay in positive territory – and even then, gains were modest at best. Materials led the way with an uninspiring 0.31% rise.
Cyclical stocks took the biggest hit, falling by almost 2% on average. To be fair, much of that was due to the sharp drop in Tesla (TSLA), which bore the brunt of the downturn.
The late-day slump also dragged down the ITS index family. The hardest hit was the ITS Shariah Index (ITSS), which consists entirely of large U.S. companies. It shed 1.75% by the close.
The ITS World Index (ITSW) fared slightly better, dipping just 0.52%, thanks to support from non-U.S. names. One bright spot was Kazakhstan’s Kaspi.kz (KSPI), whose shares rose more than 2% (+2.08%). Still, there was a sense of missed opportunity – the index, which had edged close to its all-time high the previous day, failed to push past it.
In the end, Thursday brought more uncertainty than clarity. With the market coiling ever tighter within a narrow range, the pressure is building. A breakout seems inevitable – but if sentiment is any guide, a fresh push to new highs might not be on the cards just yet.
Market outlook for 6 June 2025
Friday is shaping up to be just as intense as the days before. Market participants can only dream of calm for now.
Morning trading in Asia made it clear that the torrent of recent news is far from easing, offering investors little respite. One might have expected more optimism after the phone call between U.S. President Donald Trump and China’s President Xi Jinping, which reportedly went fairly well. But the reality turned out different: the Shanghai Composite index gained a mere 0.04%, while the Hang Seng slipped 0.35%. As we can see, there is little joy to be found in the markets.
The U.S. market also saw no significant overnight boost. Disappointment came from the very companies that could have lifted investor sentiment. After the closing bell, quarterly results were released by two prominent names – semiconductor giant Broadcom (AVGO) and sportswear retailer Lululemon Athletica (LULU).
Broadcom posted strong earnings as expected, but given the stock’s recent rally, investors rushed to lock in profits, sending shares down by more than 3%. Lululemon fared even worse: after issuing a weak forecast, the stock plummeted, shedding over 20% of its value by morning.
Fortunately, investors are not reacting too strongly to the bad news so far – futures on major U.S. indexes remain in the green, gaining a few tenths of a percent.
The day’s main event will be the release of the U.S. labour market report from the Department of Labor before the market opens. Truth be told, expectations are low. On Wednesday, ADP reported a sharp drop in new private payrolls, and yesterday’s jobless claims came in worse than forecast and higher than the previous week. All signs point to a worsening employment situation. Still, investors are holding on to hope – it dies last, as the saying goes.
That is why it’s worth staying alert and watching the news closely today – surprises are likely, and for investors, they may be anything but pleasant.