Trump Trade: Tesla bouncing back after $152B in market cap loss amid Musk spat

Catch up on the top industries and stocks that were impacted, or were predicted to be impacted, by the comments, actions and policies of President Donald Trump with this daily recap compiled by The Fly:

TRUMP-MUSK SPAT: Shares of Tesla (TSLA) fell 14% on Thursday as President Donald Trump threatened to pull government contracts for CEO Elon Musk’s companies. The stock started moving lower after President Trump said in Oval Office comments that he’s “very disappointed” in the company’s CEO Elon Musk. Musk only “developed the problem” with the tax bill when he learned of the electric vehicle mandate cut, Trump added.

Responding via X to Trump’s comments about Musk only not liking the tax bill when the electric vehicle was cut, Tesla CEO said, “Whatever. Keep the EV/solar incentive cuts in the bill, even though no oil & gas subsidies are touched (very unfair!!), but ditch the MOUNTAIN of DISGUSTING PORK in the bill. In the entire history of civilization, there has never been legislation that both big and beautiful….”

He also said, “False, this bill was never shown to me even once and was passed in the dead of night so fast that almost no one in Congress could even read it!” The post is in response to President Trump saying, “I’m very disappointed with Elon. I’ve helped him a lot. He knew the innerworkings of the bill better than anybody sitting here. He had no problem with it. All of a sudden he had a problem and he only developed the problem when he found out we’re going to cut EV mandate.”

The feud seemed to escalate with Musk further stating via X that, “Without me, Trump would have lost the election, Dems would control the House and the Republicans would be 51-49 in the Senate.” president Trump responded via Truth Social, “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!…Elon was ‘wearing thin,’ I asked him to leave, I took away his EV Mandate that forced everyone to buy Electric Cars that nobody else wanted (that he knew for months I was going to do!), and he just went CRAZY!”

Musk responded to Trump’s allegations, calling them “such an obvious lie.” 

Commenting on the spat, TD Cowen said that Thursday’s events between Elon Musk and President Trump “clearly raise the degree of near-term uncertainty” for Tesla, including with respect to how political developments might impact the company’s sales. There are more questions than answers following Thursday’s developments, and it is still too early to determine any lasting impacts, the firm tells investors in a research note. TD believes the near-term focus will likely be on Tesla’s execution of upcoming deliverables plus any political-related vehicle demand shifts. The firm estimates 35% of Tesla’s U.S. sales are in Republican counties, of which it would characterize 12% as being in “Deep Red.” Of Tesla’s 65% Democratic exposure, TD would characterize 36% as being in “Deep Blue.” The original political divide around Tesla’s brand began in Q1, the firm contends. TD has a Buy rating on Tesla with a $330 price target.

Meanwhile, Oppenheimer said that with Tesla’s CEO Elon Musk and President Trump publicly falling out, the political calculus on renewables and EV support has shifted modestly, which could result in extended timing on renewables safe-harbor provisions as Congressional leaders assess mid-term risk post Trump/Musk split. The firm sees the potential for better than feared language in the Senate budget bill driving near-term upside for solar names. At the same time, the difficult work at Tesla is just beginning as the company starts to repair brand damage while executing on its Physical AI strategy. Oppenheimer continues to see challenges in Tesla’s autonomy platform given its reliance on photon counting cameras and expects investors to be less forgiving of product delays given Musk’s adjusted political standing. The firm has a Perform rating on the shares. 

Shares of Destiny Tech100 (DXYZ), an exchange-listed portfolio with Elon Musk’s SpaceX representing 52.4% of its economic exposure, traded lower as well on Thursday after President said on social media, “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!.”

Tesla shares, however, are leading gains among the Magnificent Seven stocks on Friday morning as shares of the electric-vehicle maker are rebounding from a 14% plunge on Thursday sparked by the feud between Elon Musk and President Donald Trump. 

JET DELIVERIES: Delta (DAL) has warned that aviation tariffs could force the company to stop taking deliveries of planes made outside the U.S., possibly impacting millions of people, Reuters’ David Shepardson reports, citing a filing made with the Commerce Department. Delta told the Commerce Department that it took deliveries of 47 Airbus (EADSY) aircraft in 2023 and 2024 that were produced in Canada, Germany and France, and that if the airline had not been able to take delivery of those planes because of tariffs, it would have forced flight cancellations impacting 10 million customers. Delta said a “similar impact could be expected going forward” if the Trump administration imposes new tariffs, according to comments seen by Reuters. 

INTEREST RATES: President Trump said via Truth Social, “If ‘Too Late’ at the Fed would CUT, we would greatly reduce interest rates, long and short, on debt that is coming due. Biden went mostly short term. There is virtually no inflation (anymore), but if it should come back, RAISE ‘RATE’ TO COUNTER. Very Simple!!! He is costing our Country a fortune. Borrowing costs should be MUCH LOWER!!!”

MEDICARE SPENDING CUTS: Senate Republicans are considering cuts to Medicare spending to help pay for Donald Trump’s legislative package, Rachel Cohrs Zhang and Steven Dennis of Bloomberg report. Lawmakers are considering cutting payments to health insurance companies that run private Medicare plans, which could open up hundreds of billions of dollars in potential savings for the federal government that Republicans could use to fund tax cuts, but Senate Republicans are divided on whether to include changes to Medicare Advantage in the tax bill, three people familiar with the debate told Bloomberg. House Republicans largely avoided touching Medicare in their version of the legislation, Bloomberg points out. Publicly traded companies in the medical insurance space include CVS Health (CVS), Centene (CNC), Cigna (CI), Elevance Health (ELV), Humana (HUM), Molina Healthcare (MOH) and UnitedHealth (UNH).

INDIA-U.S. TRADE TALKS: Trade talks between Indian and U.S. officials have been extended into next week as both sides seek consensus on tariff cuts in the farming and auto sectors, Manoj Kumar of Reuters reports, citing Indian government sources. Negotiators, who had initially aimed to wrap up talks by Friday, will now continue discussions on Monday and Tuesday to resolve outstanding differences, a second Indian official told Reuters. Both sides are aiming to finalize an interim deal before a July 9 deadline, the sources added.