The discord between Donald Trump and Elon Musk has shaken the financial markets, causing Tesla stocks to plummet and dragging the cryptocurrency sector into a broad risk-off trend.
The rift peaked on June 5 during a meeting at the White House with the German Chancellor, where Trump expressed his dissatisfaction with Musk, who until recently had been one of his closest advisors. "I am very disappointed in Elon," Trump said. "I helped Elon a lot."
Musk did not waste time responding. In a post on X, he accused Trump of being ungrateful and retorted, "Without me, Trump would have lost the election." This exchange marks a significant breaking of their once-strong alliance, built during Trump's second term.
Musk criticized Trump for exacerbating market volatility.
Tensions escalated further when Musk responded "Yes" to a post on X calling for Trump's impeachment. This remark drew immediate attention, although any such efforts are considered politically impossible, as the Republicans currently hold a majority in both houses of Congress.
Stock prices are currently down about 33% since inauguration day, reflecting growing concerns that this conflict could jeopardize billions of dollars in federal subsidies and critical contracts for Tesla's long-term outlook.
Until recently, Musk remained an important unofficial advisor to Trump, helping to shape key policy decisions and frequently representing the administration abroad.
His sudden departure from this group left a significant void in the technology policy alignment, as the market is now uncertain about how the administration will handle critical issues such as electric vehicles and space infrastructure.
Adding to the uncertainty, Musk hinted at launching an entirely new political movement. That possibility, along with the risk of regulatory reversal or capital withdrawal, has prompted investors to brace for a more hostile environment. And that applies not only to Tesla but also to the broader technology and cryptocurrency sectors which often move in parallel with Musk's influence.
The clash has become more than just a political sideshow. This is a rare case where personality-driven politics collides with fundamental market factors. Currently, both cryptocurrency and Tesla appear to be stuck in a standoff.