Tesla shares gain after $152 billion selloff
New York
Tesla shares recouped some losses that had been triggered by a spat between CEO Elon Musk and US President Donald Trump, even though a truce appeared uncertain on Friday as a White House official said the president was not keen on talking to his former ally.
The stock rose nearly 4 percent after a steep fall in the previous session, that wiped out $152 billion in market value, when the world's most powerful man and its richest publicly entered a war of words over the tax and spending bill.
Stay up to date with the latest news, trends and innovations that are driving the global automotive industry with the Reuters Auto File newsletter.
Earlier, a Politico report had said Trump and Musk were likely to talk later in the day. Musk had signalled on X he was open to easing tensions with the president, agreeing with calls for a detente from users on the social media platform.
But Trump told CNN on Friday, 'I'm not even thinking about Elon,' adding the billionaire has 'got a problem'.
Tensions escalated on Thursday after Musk stepped up his criticism of Trump's sweeping tax bill, which proposed largely ending the popular $7,500 EV tax incentive by the end of 2025.
In response, Trump suggested cuts to the government's contracts with Musk's companies, including rocket maker SpaceX.
'It might be a bit too hopeful to think their relationship will ever go back to what it once was, but if cooler heads prevail and the tension eases, that would definitely be a big improvement for Tesla,' said Tesla shareholder Matthew Britzman, who is an analyst at Hargreaves Lansdown.
An open clash with Trump could pose multiple hurdles for Tesla and the rest of Musk's sprawling business empire.
The US Transportation Department regulates vehicle design standards and would have a big say in whether Tesla can mass-produce robotaxis without pedals and steering wheels.
Tesla did not immediately respond to a request for comment. Tesla stock is down 26.9 percent this year following a 14 percent drop on Thursday. Still, the shares trade at 120 times expected earnings, a lofty multiple compared to other automakers and even tech giants such as Nvidia. The shares have been on a turbulent ride since last July when Musk backed Trump's White House bid. They surged initially as investors bet on less regulatory pressure for robotaxis, but tumbled due to soft sales and brand fallout from Musk's political stance.
Stronger sales from potential Republican customers were expected to offset a liberal boycott, but analysts warned that Musk's recent actions may erode that buffer too.
'With Musk alienating Republicans, there is no one left to prop up consumer sentiment towards Tesla, which could lead towards a full-scale collapse in brand perception,' said political strategist Evan Roth Smith, co-founder of Slingshot Strategies.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Al Jazeera
42 minutes ago
- Al Jazeera
Trump sets 19% tariff on Philippines in new trade deal
United States President Donald Trump said he has reached a trade deal with the Philippines, charging it 19 percent tariff rate for goods it exports to the US, while US goods will pay zero tariffs. The president announced the new agreement on Tuesday on his social media platform Truth Social shortly after his meeting with President Ferdinand Marcos Jr at the White House. 'We concluded our Trade Deal, whereby The Philippines is going OPEN MARKET with the United States,' Trump said on his Truth Social platform after welcoming Marcos to the White House. The 19 percent tariff rate was just below the 20 percent threatened by Trump earlier this month, but above the 17 percent rate set in April when Trump announced what he called reciprocal tariff rates for dozens of countries. It matches the 19 percent rate announced for Indonesia and bests Vietnam's slightly higher rate of 20 percent. The US had a deficit of nearly $5bn with the Philippines last year on bilateral goods trade of $23.5bn. Marcos, the first Southeast Asian leader to meet Trump in his second term, told reporters at the start of the meeting that the US was his country's 'strongest, closest, most reliable ally'. Trump said the two Pacific allies would also work together militarily but gave no details. Philippine Assistant Foreign Secretary Raquel Solano said last week that trade officials have been working with US counterparts seeking to seal a 'mutually acceptable and mutually beneficial' deal. Protesters gathered near the White House as Marcos arrived, demanding the Philippine leader address the pleas of Filipino Americans and migrant workers who have made multiple requests for support amid US immigration raids. Trump underscored the importance of the US-Philippine military relationship, saying, 'They're a very important nation militarily, and we've had some great drills lately.' Marcos, who arrived in Washington on Sunday, met with Defense Secretary Pete Hegseth and Secretary of State Marco Rubio on Monday. During his trip, he will also meet US business leaders investing in the Philippines. Philippine officials say Marcos planned to stress that Manila must become economically stronger if it is to serve as a truly robust partner to the US in the Asia Pacific region. Looming pressure on China During the Oval Office event, Trump said he may visit China for a landmark trip 'in the not-too-distant future' and noted the Philippines had distanced itself from Beijing after his election last November. 'The country was maybe tilting toward China, but we un-tilted it very, very quickly,' Trump said. The US president has sought to lower tensions with Beijing in recent weeks after pausing a tit-for-tat tariff war that has upended global trade and supply chains. US Treasury Secretary Scott Bessent said on Tuesday he would meet with Chinese officials in Sweden next week. No comment was immediately available from Marcos, who did not speak to reporters before leaving the White House grounds.
Al Jazeera
10 hours ago
- Al Jazeera
Why Trump's attacks on Jerome Powell are raising fears for the US economy
United States President Donald Trump has spent months attacking US Federal Reserve chairman Jerome Powell for not moving faster to lower interest rates. While Trump is not the first president to clash with the head of the US central bank on monetary policy, he has gone further than his predecessor by threatening to fire Powell and pressuring him to resign. Trump's barbs have raised concerns about the prospect of the Fed losing its independence, which would have serious ramifications for the US economy. What has Trump said about Powell? Trump's main gripe with Powell has been the Fed's decision to keep its benchmark interest rate in the range of 4.25 to 4.50 percent. The US central bank has resisted calls to lower the rate, which would spur economic growth by reducing borrowing costs across the economy, to keep a lid on inflation. While inflation remains modest at present, Powell and his colleagues fear that prices could rise significantly in the coming weeks and months due to Trump's tariffs. Trump has argued that the rate should be as low as 1 percent. Trump has been at odds with Powell since his first term, when he nominated him to the top job, but the president began ramping up his attacks in April, when he branded the monetary policy chief 'a major loser' and 'numbskull' whose 'termination cannot come fast enough'. Since then, Trump has made conflicting remarks about whether he intends to fire Powell, and last week asked a group of Republican lawmakers for their opinion on the matter. While Trump continues to blast Powell on social media, other top White House officials have joined the condemnation. Earlier this month, Office of Management and Budget Director Russell Vought accused Powell of mishandling the 'ostentatious' $2.5bn refurbishment of the Fed's headquarters in Washington, DC. On Tuesday, US Treasury Secretary Scott Bessent accused the Fed of 'persistent mandate creep into areas beyond its core mission' and called for a review of the renovation project. Today in a CNBC interview, I called for a review of the Federal Reserve. It is my belief that the central bank should conduct an exhaustive internal review of its non-monetary policy operations. Significant mission creep and institutional growth have taken the Fed into areas that… — Treasury Secretary Scott Bessent (@SecScottBessent) July 21, 2025 Does Trump have the power to remove Powell? The Fed chair is harder to remove than the heads of other independent government agencies. Under the Federal Reserve Act of 1913, the president may remove the head of the central bank 'for cause' – widely interpreted to mean proof of corruption or malfeasance. A landmark 1935 Supreme Court ruling further insulated the Fed from political pressure by explicitly stating that the heads of independent agencies cannot be removed without cause. David Wilcox, a senior fellow at the Peterson Institute for International Economics who served on the staff of the Federal Reserve Board, said the Trump Administration appeared to be zoning in on the Fed's renovation project to create a pretext to fire Powell. 'The way they're doing that is they're drumming up a lot of controversy around the expenses that have been incurred and will be incurred in the renovation of two of the historic buildings,' Wilcox told Al Jazeera. 'The drumbeat of criticism seems to be that Powell allegedly has mishandled this situation, and concern is that this very small-scale situation might be somehow blown up into an excuse for firing Powell 'for cause'.' Is there any precedent for Trump's campaign against Powell? In the late 1960s and early 1970s, presidents Lyndon B Johnson and Richard Nixon – a Democrat and a Republican – both famously exerted pressure on the Fed chair to keep interest rates low. Some historians have theorised that Nixon's cajoling of then-Fed chair Arthur Burns stopped him from rolling out rate hikes that could have halted the emergence of double-digit inflation in the mid-1970s. 'What does compromising central bank independence do? It runs the possibility of giving some kind of short-term gain for long-term pain,' Mark Spindel, the CIO of Potomac River Capital and a Federal Reserve historian, told Al Jazeera. 'And politicians have short memories.' How will markets react if Powell is removed? Suggestions that Trump could remove Powell have roiled markets on several occasions. On Wednesday, the benchmark US S&P 500 briefly fell by 0.7 percent, and the US dollar sank 0.9 percent, following reports that Trump had asked Republican lawmakers whether he should fire the Fed chair. Stocks recovered a short time later after Trump denied that he had any plans to remove Powell, the latest example of what investors have dubbed the 'TACO Trade' – short for 'Trump Always Chickens Out'. If Trump were to follow through on his threat to remove Powell, the stock market and confidence in the US economy would take a major hit, Wilcox said. 'It would probably be reflected in an increase in the expected inflation that's built into borrowing rates. It would be reflected in an increase in the risk premiums that are built into long-term Treasury rates,' he added. 'It would probably be reflected in a weakening of the US dollar because of a loss in confidence that would follow from the knocking down of yet one more signature aspect [of the economy] that has been taken for granted for many decades.' Why might Trump not want to fire Powell? Fed historian Spindel said Trump may ultimately decide to keep Powell despite his threats. The Fed chairman's term expires in May next year, Spindel said, and, until then, Trump can use Powell as a scapegoat for any problems with the economy. As a businessman, Trump also considers the stock market an important barometer of success, Spindel added. 'The market is an important governor on his policies,' he said. 'He has a large constituency in the corporate sector. He obviously enjoys support from the middle and upper wealthy class, and he doesn't want to torpedo the equity market.'
Al Jazeera
17 hours ago
- Al Jazeera
Iran's FM says nuclear enrichment will continue, but open to talks
Iranian Minister of Foreign Affairs Abbas Araghchi has said that Tehran cannot give up on its uranium enrichment programme, which was severely damaged by waves of US and Israeli air strikes last month. 'It is now stopped because, yes, damages are serious and severe, but obviously, we cannot give up our enrichment because it is an achievement of our own scientists, and now, more than that, it is a question of national pride,' Araghchi told the US broadcaster Fox News in an interview aired on Monday. Araghchi said at the beginning of the interview that Iran is 'open to talks' with the United States, but that they would not be direct talks 'for the time being'. 'If they [the US] are coming for a win-win solution, I am ready to engage with them,' he said. 'We are ready to do any confidence-building measure needed to prove that Iran's nuclear programme is peaceful and would remain peaceful forever, and Iran would never go for nuclear weapons, and in return, we expect them to lift their sanctions,' the foreign minister added. 'So, my message to the United States is that let's go for a negotiated solution for Iran's nuclear programme.' Araghchi's comments were part of a 16-minute interview aired on Fox News, a broadcaster known to be closely watched by US President Donald Trump. 'There is a negotiated solution for our nuclear programme. We have done it once in the past. We are ready to do it once again,' Araghchi said. Tehran and Washington had been holding talks on the nuclear programme earlier this year, seven years after Trump pulled the US out of the Joint Comprehensive Plan of Action (JCPOA), which Tehran signed with several world powers in 2015. Under the pact, Iran opened the country's nuclear sites to comprehensive international inspection in return for the lifting of sanctions. Trump's decision to pull the US out of the deal came after Israeli Prime Minister Benjamin Netanyahu accused Iran of pursuing a 'secret nuclear programme'. Iran has long maintained that its nuclear enrichment programme is strictly for civilian purposes. The US and Iran engaged in talks as recently as May to reach a new deal, but those negotiations broke down when Israel launched surprise bombing raids across Iran on June 13, targeting military and nuclear sites. More than 900 people were killed in Iran, and at least 28 people were killed in Israel before a ceasefire took hold on June 24. The US also joined Israel in attacking Iranian nuclear facilities, with the Pentagon later claiming it had set back the country's nuclear programme by one to two years. Araghchi said on Monday that Iran's Atomic Energy Organisation is still evaluating how the attacks had affected Iran's enriched material, adding that they will 'soon inform' the International Atomic Energy Agency (IAEA) of its findings. He said any request for the IAEA to send inspectors would be 'carefully considered'. 'We have not stopped our cooperation with the agency,' he claimed. IAEA inspectors left Iran after Iranian President Masoud Pezeshkian signed a law suspending cooperation with the IAEA earlier this month. Tehran had sharply criticised the IAEA and its chief, Rafael Grossi, over a June 12 resolution passed by the IAEA board accusing Tehran of non-compliance with its nuclear obligations. Iranian officials said the resolution was among the 'excuses' that Israel used as a pretext to launch its attacks, which began on June 13 and lasted for 12 days. Speaking to journalists earlier on Monday, Stephane Dujarric, the spokesperson for the United Nations secretary-general, said that the UN welcomed renewed 'dialogue between the Europeans and the Iranians', referring to talks set to take place between Iran, France, Germany and the United Kingdom in Turkiye on Friday. The three European parties to the former JCPOA agreement have said that Tehran's failure to resume negotiations would lead to international sanctions being reimposed on Iran.
