kweku mgee

Forget Brad and Angelina, Ben and Jenn, The Beatles, Brexit, or even Henry VIII and his wives. This is the biggest split in recent history. Donald Trump and Elon Musk have officially ended their bromance, and it looks like it will spell trouble for the house of government-subsidized cards that make up Elon’s business empire.

In a post on his Truth Social network Thursday afternoon, Trump said his administration could end the government contracts that are keeping Musk’s SpaceX alive.“The easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon’s Governmental Subsidies and Contracts. I was always surprised that Biden didn’t do it!” Trump wrote.
Then he added that Musk “just went CRAZY” when Trump ordered the Feds to end the EV subsidies that were generating much of Tesla’s profits (see below). Musk was quick to fire back, hitting at what could be a major sore spot for the president: “Time to drop the really big bomb: @realDonaldTrump is in the Epstein files. That is the real reason they have not been made public. Have a nice day, DJT!”

It all started with Musk’s Tuesday tweet that called Trump’s “One Big Beautiful Bill” a fiscal disaster. “I’m sorry, but I just can’t stand it anymore. This massive, outrageous, pork-filled Congressional spending bill is a disgusting abomination,” Musk wrote. The next day the nonpartisan Congressional Budget Office said the bill would add at least $2.7 trillion to the existing $36 trillion national debt over the next decade.

In the past 20 years, Musk’s companies have received more than $38 billion from the federal and local governments, the Washington Post reported, two-thirds of that in the past five years. Last year, Musk’s companies got $6.3 billion and they were expecting even more this year.

Besides EV subsidies, the money goes to SpaceX’s rocket programs, which also send and recover astronauts from the International Space Station, and launch Starlink satellites, which are used by the U.S. military, as well as by civilians.Musk has already shown with DOGE what he can do to Trump’s enemies. But what can he do to Trump’s friends? And what about his frenemies? And what about his enemies who once were his friends?
#TrumpVsMusk

A screen shows Tesla CEO Elon Musk and U.S. President Donald Trump, as a futures-options trader works on the floor of the the New York Stock Exchange (NYSE) in New York City, U.S., May 30, 2025. REUTERS/Jeenah Moon/File Photo
Summary

Tesla's stock decline weighs on indexes like S&P 500, Nasdaq 100

Magnificent Seven stocks heavily influence equity benchmarks

Tesla presence in ETFs spans about 10% of total universe

The rift between President Donald Trump and Tesla chief Elon Musk has captivated the world as a political drama, but it has also become a Wall Street spectacle, highlighting the risk to equity markets from the world's biggest stocks.
Tesla (TSLA.O) shares slid 14% on Thursday as Musk and Trump feuded largely on social media, including the president threatening to cut off government contracts to Musk's companies.

Although the stock modestly rebounded on Friday, Thursday's decline dragged down some of the most closely followed equity indexes, which are more heavily influenced by companies with the largest market values.

Tesla's fall accounted for about half of Thursday's declines for both the S&P 500 (.SPX) and the Nasdaq 100 (.NDX), which fell 0.5% and 0.8% respectively, on the day.

The S&P 500 is generally considered the benchmark for the U.S. stock market while the tech-heavy Nasdaq 100 (.NDX) is the basis for the Invesco QQQ Trust (QQQ.O), one of the most popular exchange-traded funds.

"It's a widely held stock," said Robert Pavlik, senior portfolio manager at Dakota Wealth. "When this big-name company that represents a sizable portion of the index sells off, it has an overall effect on the index, but it also has a psychological effect on investors."
Tesla's decline points to the risk that many investors have long warned about, of indexes being heavily influenced by a handful of megacap stocks. Tesla is the smallest by market value of a group of massive tech and growth companies known as the "Magnificent Seven," which overall drove equity index gains in 2023 and 2024. The group has had a rockier 2025 so far, but more recently has been rebounding.

The Magnificent Seven, which include Apple (AAPL.O), Microsoft (MSFT.O) and Nvidia (NVDA.O), had a combined weight of nearly one-third in the S&P 500 overall as of Thursday's close.

"If you're an investor and you own the S&P or the Nasdaq 100 ... you just need to be aware that you own a lot of exposure to a very small cohort of names," said Todd Sohn, ETF and technical strategist at Strategas.

Tesla's decline on Thursday knocked about $150 billion off its market value, while its weights in the S&P 500 and Nasdaq 100 stood at 1.6% and 2.6%, respectively.

Tesla shares rebounded somewhat on Friday, up about 5% in mid-day trade, putting its market value around $970 billion. Microsoft and Nvidia, whose market values exceed $3 trillion, held weights of 6.9% and 6.8% in the S&P 500 as of Thursday.

Tesla shares are down some 37% since mid-December, a period that has seen the S&P 500 fall about 1%, meaning its influence in the index has also declined over that time.

The shares hold a broad influence among ETFs. Tesla has a varying presence in about 10% of the total universe of about 4,200 ETFs, according to Sohn.

Those include the Consumer Discretionary Select Sector SPDR Fund (XLY.P), which sank 2.5% on Thursday, and the Roundhill Magnificent Seven ETF (MAGS.Z), which dropped 2.6%.

"It's very important to know holistically what is in all your ETFs, because a lot of them are overlapping," Sohn said.

Reporting by Lewis Krauskopf; Editing by Alden Bentley and Diane Craft
#BigTechStablecoin #TrumpVsMusk