Musk-Trump Conflict Reignites... Tesla's $1 Trillion Market Cap Collapses Again [New York Stock Exchange Briefing]

The New York Stock Exchange closed mixed as tensions between former President Donald Trump and Tesla CEO Elon Musk reignited. The market also kept an eye on ongoing negotiations regarding the mutual tariff suspension period, which has a week left.

On the 1st (local time) at the New York Stock Exchange, the Dow Jones Industrial Average finished at 44,494.94, up 400.17 points (0.91%) from the previous trading day. On the other hand, the S&P 500 Index fell by 6.94 points (0.11%) to 6,198.01, and the tech-heavy Nasdaq Index ended at 22,02.89, down 166.84 points (0.82%).

President Trump stated on his social media platform Truth Social that the Department of Government Efficiency (DOGE) should investigate government subsidies received by companies led by CEO Elon Musk. This was interpreted as a response to Musk's recent harsh criticism of Trump's massive tax cut and spending bill as "madness and destructive."

As a result, Tesla shares plunged 5.34% on the day, closing at $300.71. Market capitalization also dropped to $968.5 billion, causing the $1 trillion market cap to collapse. This is the first time since early last month that Tesla's valuation fell below the $1 trillion mark.

Trump's bill narrowly passed the United States Senate that day by a vote of 51 to 50. The bill includes extensions of sunset clauses for income and corporate tax reductions as well as key Trump promises such as tax exemptions for tip income and overtime pay. The bill will be re-discussed in the United States House of Representatives for possible amendments.

The market is also paying attention to Trump's stance on country-specific mutual tariff rates. The mutual tariff suspension deadline is one week away, set for the 8th (local time). The Trump administration has been negotiating trade deals with various countries during the tariff suspension period, but so far only the United Kingdom has reached an agreement.

When asked by reporters on his private plane after a visit to Florida whether the mutual tariff suspension deadline could be extended, Trump replied, "No. I am not considering an extension."

He added, "I will send letters to many countries," explaining, "Some countries may not allow trade at all. But in most cases, we’ll just set a number and simply send a letter, probably one or one and a half pages long at most."

Using Japan as an example, Trump said, "We have dealt with Japan, but I am not sure if we can reach an agreement. They are very tough," adding, "Now, all I have to do is write them a letter saying, 'Since you can't do what we want, whether it’s 30% or 35%, you will pay the number we determine.'"

By stock, most technology stocks declined. NVIDIA fell 2.97%, Microsoft (MS) dropped 1.08%, Meta lost 2.56%, Broadcom fell 3.96%, and Alphabet decreased 0.27%. On the other hand, Apple rose 1.29% and Amazon gained 0.49%.

Circle, the issuer of the stablecoin USDC, saw its stock surge more than 6% following news that it had applied to regulators for a trust bank charter.

Stocks related to diabetes management devices all closed lower on reports that the Centers for Medicare & Medicaid Services (CMS) was pushing to reduce insurance coverage for continuous glucose monitors (CGMs) and insulin pumps.

Clean energy stocks closed sharply higher, driven by expectations for tax benefits after the United States Senate passed a bill that eliminated tax provisions on solar and wind projects.

Noh Jeong-dong, Hankyung.com Reporter dong2@hankyung.com