Markets Tumble Amid Trade Uncertainties and Musk-Trump Furor
Stock Market Drops on June 5, 2025: Investors Ponder Trade Negotiations Outcomes, Prepare for Employment Data; Tesla Plunges 14% during Musk-Trump Controversy
Investors grappled with mixed signals from the trade front and a heated spat between President Donald Trump and Tesla CEO Elon Musk, causing stocks to plummet on Thursday. The Dow Jones Industrial Average dipped 0.3%, while the S&P 500 and tech-heavy Nasdaq Composite slid 0.5% and 0.8%, respectively.
The S&P 500 and Nasdaq enjoyed a three-day winning streak before Thursday, although gains were modest. The Dow, however, continued its downward trend for the second consecutive day. Markets have bounced back from early April lows, with the S&P 500 and Nasdaq recording their biggest monthly gains since November 2023.
The rebound is largely due to easing concerns about trade tariffs and solid corporate earnings, despite ongoing uncertainties about the future direction of trade policy. Investors are eagerly anticipating signs of progress on the various trade deals the White House is negotiating before looming deadlines for tariffs to be reimposed.
Trump held a 90-minute conversation with his Chinese counterpart, Xi Jinping, on Thursday morning. Both leaders reported the discussion was "very positive," with plans for further talks shortly. Over the past week, the U.S. and China have accused each other of violating the terms of a recent agreement, agreed to slash tariffs, and negotiate a broader deal.
In trade-related news, the U.S. trade deficit narrowed more than expected as imports decreased in response to tariffs. Weekly jobless claims figures were slightly higher than anticipated. The big economic event this week is the release of the May jobs report on Friday morning.
Tesla (TSLA) was a hot topic on Thursday, as tensions escalated between Trump and Musk. Shares closed 14% lower, building on Wednesday's steep decline, after Trump expressed disappoint at Musk, who then fired back with a series of social media posts. Musk's departure from his role in the Trump administration's Department of Government Efficiency last week has sparked concerns about government intervention in Tesla-related matters.
Other mega-cap technology stocks experienced mixed fortunes, while Brown-Forman tumbled 18% following a grim outlook from the Jack Daniel's whiskey maker. PVH also plunged 18% after warning of tariff-induced profit hits. Meanwhile, MongoDB shares soared 13% following better-than-expected results and a promising outlook, driven by growing demand for AI-related products.
As the trade negotiations evolve and evolve, markets will remain sensitive to the latest developments, with potentially significant implications for individual stocks and overall market trends.
Tesla Exits the $1 Trillion Club Amid Musk-Trump Rift
Tesla's stock took a beating after CEO Elon Musk sparred with President Donald Trump on social media platforms, costing the EV maker its place in the $1 trillion market cap club. With a 14% decline on Thursday, Tesla shed over $150 billion, dropping its market value to around $913 billion.
Musk has been critical of the One Big, Beautiful Bill Act, which Trump supports, calling it a "disgusting abomination" on Tuesday. Musk also called on Senate to "kill the bill" and vowed to oppose it fiercely. Trump expressed his dissatisfaction with Musk on Thursday, stating that he would have won the 2020 election without the financial support Musk provided to Republicans.
Thursday's decline erased much of Tesla's rally following Musk's announcement that he would devote more time to his companies and his departure from the Trump administration in May.
What to Expect From the Jobs Report on Friday
With the release of the monthly jobs report scheduled for Friday morning, investors will be closely watching employment figures and unemployment rates. According to a survey by Dow Jones Newswires and The Wall Street Journal, economists expect the report to reveal the addition of 125,000 jobs in May, a slowdown from the unexpectedly high 177,000 in April. The unemployment rate is predicted to remain at 4.2%.
The Labour Bureau's employment report has shown surprising resilience in the face of tariff pressures, although private sector reports suggest a rough road ahead for the economy. Stay tuned for the official government report on the labour market on Friday.
Brown-Forman Plummets as Spirits Maker Warns of Challenging Outlook
Brown-Forman, the maker of Jack Daniel's whiskey, was the worst-performing stock in the S&P 500 on Thursday following a pessimistic outlook for the coming fiscal year. The company warned of a challenging operating environment due to macroeconomic and geopolitical volatility, uncertain consumer demand, and the potential impact of tariffs. Brown-Forman expects full-year organic sales and operating income to dip by a low single-digit percentage.
Tesla Sinks as Musk-Trump Feud Intensifies
Tesla's stock dropped for a second day in a row amid escalating tension between CEO Elon Musk and President Donald Trump. Trump voiced his displeasure with Musk's recent criticisms of the budget reconciliation bill and suggested that the EV maker's government contracts could be in jeopardy. Musk responded with a series of heated social media posts and dismissed Trump's claims that he knew the bill's details. In addition, Tesla reported disappointing sales figures in several European countries, which further dampened investor sentiment.
What Analysts Think of Broadcom Ahead of Earnings Thursday
Broadcom is set to report second-quarter results on Thursday, and analysts expect solid revenue and profit growth propelled by strong demand for AI chips. Oppenheimer analysts called Broadcom the "No. 2 AI franchise after NVDA" and raised their price target to $265 from $225. Out of 14 analysts tracked by Visible Alpha, 13 have a "buy" rating for Broadcom stock, with one "hold."
Stablecoin Issuer Circle Prices IPO Above Expected Range
Fintech firm Circle Internet Group, which issues the USDC stablecoin, priced its IPO above its expected range on Wednesday. The offering, which totals 34 million shares at $31 each, surpassed the previously announced range of $27 to $28 per share. Shares are expected to start trading on the New York Stock Exchange on Thursday under the ticker "CRCL."
Five Below Soars on Strong Results, Boosted Outlook
Discount retailer Five Below saw its shares jump on Thursday after reporting better-than-expected quarterly results and raising its full-year outlook. The company attributed its growth to increased transactions and strong sales at new locations. Five Below now expects full-year adjusted EPS of $4.25 to $4.72, a significant increase from its previous outlook of $4.10 to $4.72.
PVH Sinks as Calvin Klein Owner Warns of Tariff Hits to Profits
Shares of clothing company PVH plummeted on Thursday following its announcement that full-year profit will be impacted by new U.S. tariffs. The company, which owns brands such as Calvin Klein and Tommy Hilfiger, now expects 2025 adjusted EPS of $10.75 to $11.00, down from its earlier outlook of $12.40 to $12.75. PVH stated that the guidance reflects an estimated net negative impact of $1.05 per share due to tariffs.
Watch These MongoDB Levels as Stock Surges After Earnings
MongoDB, an AI-powered software company, lifted its full-year outlook and expanded its stock buyback program, sending its shares soaring on Thursday. The company highlighted impressive revenue growth for its flagship Atlas multi-cloud database subscription service and record-high net customer additions in six years. Analysts suggest watching crucial overhead levels on MongoDB's chart around $253, $298, and $355, while monitoring support near $212.
- The Tesla stock lost its spot in the $1 trillion market cap club following a 14% decline, as investors reacted to the escalating feud between CEO Elon Musk and President Donald Trump.
- The upcoming jobs report release on Friday holds significant importance for investors, who are anticipating the addition of 125,000 jobs in May, a slowdown from April's unexpectedly high figure.
- Brown-Forman, the maker of Jack Daniel's whiskey, experienced significant losses as shares plummeted 18% following the company's warning of a challenging operating environment due to various economic and geopolitical factors.
- Tesla continued to struggle after a second day of declines, with Musk-Trump tensions and disappointing sales figures in Europe contributing to investor unease.
- Broadcom, a key player in the AI chip market, is scheduled to release its second-quarter results on Thursday, with analysts expecting strong growth in revenue and profit.
