U.S. stocks ended sharply lower on Thursday, fueled by a sharp decline in shares of Elon Musk’s electric vehicle company after he and President Donald Trump engaged in a multi-hour tirade against each other. All three major indexes ended in negative territory.
The Dow Jones Industrial Average (DJI) declined 0.3% or 108 points, to close at 42,319.74 points.
The S&P 500 slid 0.5% or 31.51 points to end at 5,939.30 points. Consumer discretionary and consumer staple stocks were the worst performers.
The Consumer Discretionary Select Sector SPDR (XLY) fell 2.5%, while the Consumer Staples Select Sector SPDR (XLP) declined 1%. The Materials Select Sector SPDR (XLB) lost 0.6%. Ten of the 11 sectors of the benchmark index ended in negative territory.
The tech-heavy Nasdaq lost 0.8%, or 162.04 points, to finish at 19,298.45 points.
The fear-gauge CBOE Volatility Index (VIX) was up 4.94% to 18.48. Decliners outnumbered advancers on the NYSE by a 1.11-to-1 ratio. On Nasdaq, a 1.48-to-1 ratio favored declining issues. A total of 17.3 billion shares were traded on Thursday, lower than the last 20-session average of 17.9 billion.
Shares of Tesla, Inc. (TSLA) lost 14.3% on Thursday as the bitter feud between Musk and Trump intensified, with both taking shots at each other. Trump said that he was “very disappointed” with Musk. The Tesla CEO fired back, saying that “without me, Trump would have lost the election.”
The spat got uglier as Trump after Trump called Musk “CRAZY” and threatened to “cut his companies’ government contracts.” The verbal spat went on for hours, with Tesla losing nearly $150 billion in value. The company also lost its trillion-dollar status during Thursday’s session. Shares of Tesla have now fallen in four out of the past five sessions.
The Trump-Musk tirade unsettled the broader market. Meanwhile, the volatility continued as Trump and Chinese President Xi Jinping held a phone call to discuss tariff-related issues. Trump later said in a Truth Social post that it was a “very good phone call,” but it remains unclear what the two leaders discussed and what was achieved.
However, Trump said that the trade teams from both nations will soon meet for negotiations.
Meanwhile, investors are still digesting a disappointing jobs report released earlier in the week. According to a report from payrolls processing company Automatic Data Processing, Inc. (ADP), private payrolls increased just 37,000 in May, raising concerns over a slowing labor market. ADP has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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