Tesla Stock Soars Back: How the Musk-Trump Drama Influenced the Market Trend

Shares of Tesla had a wild day on Friday, rebounding after a sharp drop the day before. The stock climbed over 5% by the afternoon, following a 14% plunge on Thursday—the second steepest drop since 2020. Despite Friday’s gain, Tesla’s stock is still down about 13% for the week.

The drama started earlier in the week when Elon Musk openly criticized a policy bill backed by former President Trump, calling it an “abomination.” This backlash sparked concerns among investors about how the feud might impact Musk’s businesses. Trump even threatened to cut federal contracts and tax subsidies worth billions for Musk’s companies. This raises big questions for Tesla, especially since it focuses heavily on autonomous driving, an area that could face increased scrutiny from the federal government.

James Stanley, a senior strategist at StoneX, stated, “It’s tough to feel optimistic about investing in Tesla right now.” He explained that the stock had previously gained momentum under the belief the Trump administration would be a supporter. However, with the current tensions, he suggested the stock may be overvalued.

On the flip side, some analysts are still feeling hopeful. Wedbush Securities insisted that this conflict won’t deter their positive outlook on Tesla and the future of autonomous vehicles. They note that the proposed Republican spending bill could remove a $7,500 federal tax credit that has effectively lowered electric vehicle costs, potentially costing Tesla about $1 billion in annual profit. Despite this, Musk has downplayed the issue in the past.

Trump and Congressional Republicans also plan to eliminate rules allowing Tesla to sell clean air credits to other automakers that don’t meet environmental standards. In the first quarter, Tesla earned $595 million through these credits—more than the company’s net profit of $409 million.

Tesla’s stock trajectory has been tumultuous ever since Trump’s election. It peaked towards the end of 2024, only to face declining numbers this year as public protests grew against Musk’s involvement with the former president’s administration. Overall, Tesla shares have dropped about 20% so far this year.

In the world of finance, volatility always brings uncertainty, influencing investment strategies and public perception. As new developments unfold, both investors and analysts will need to keep a close eye on the landscape.

For more detailed updates on Tesla and the automotive industry, check resources like the latest report from Bloomberg or insights from MarketWatch.



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United States Politics and Government,Electric and Hybrid Vehicles,Stocks and Bonds,Law and Legislation,Tesla Motors Inc,Musk, Elon,Trump, Donald J