Published by Global Banking & Finance Review®
Posted on June 6, 2025
3 min readLast updated: January 23, 2026
Add as preferred source on GoogleThe Trump-Musk feud led to a 14% drop in Tesla shares, impacting global markets ahead of the U.S. payrolls report.
A look at the day ahead in European and global markets from Stella Qiu
It could be the most expensive breakup ever.
The bromance-turned-to-brawl between U.S. President Donald Trump and billionaire Elon Musk sparked a 14% drop in Tesla shares overnight, wiping out $150 billion in market value. Then there's the tens of billions of dollars in SpaceX government contracts that Trump has threatened to cut.
High-stakes political drama aside, investors have not lost sight of the U.S. payrolls report looming later in the day, after a run of soft economic data this week left markets wary of a downside surprise.
Any unexpected weakness in the U.S. labour market could be enough to get the Federal Reserve's policy-makers thinking again about rate cuts, after sitting on their hands since December to assess the inflationary impact of Trump's tariffs.
The Trump-Musk feud was not without wider consequences for markets, though. Even bitcoin prices tumbled 4% overnight as investors reckoned Trump's support should perhaps not be counted on indefinitely.
Asian technology shares followed Wall Street lower, helping to nudge most of the region's stock markets into negative territory. Japan's Nikkei was an exception, rising 0.3%.
There were signs in the Asia morning on Friday that tempers may be cooling down a bit, with Trump telling Politico that "it's okay" when asked about the breakup and Tesla stocks steadying in after-hours trading.
In the meantime, investors found little reason to cheer the phone call on trade between Trump and Chinese President Xi Jinping, which produced little more than an agreement to talk further.
As for the U.S. payrolls, forecasts are centred on a rise of 130,000 jobs in May, with the unemployment rate holding steady at 4.2%.
Fed funds futures imply little chance of a rate cut until September, although a move at that time is about 90% priced in with another expected in December.
Worries of a downside surprise on payrolls kept markets subdued. Wall Street futures were mostly flat and European markets are set for a lower open, with EUROSTOXX 50 futures down 0.2%.
In the currency markets, the euro rose to a six-week high of $1.1495 overnight after the European Central Bank cut rates but signalled it was nearing the end of its policy easing cycle. Investors have given up on the chances of a cut in July, while the final move is expected in December.
Key developments that could influence markets on Friday:
-- German industrial output, trade data for April
-- Eurozone retail sales for April
-- U.S. nonfarm payrolls for May
(By Stella Qiu; Editing by Edmund Klamann)
The feud caused Tesla shares to drop 14%, resulting in a loss of $150 billion in market value.
Investors are focused on the U.S. payrolls report, with forecasts predicting a rise of 130,000 jobs.
Bitcoin prices fell by 4% as investors reconsidered the reliability of Trump's support.
Fed funds futures indicate little chance of a rate cut until September, with a 90% probability of a move then.
Asian technology shares followed Wall Street lower, leading most regional stock markets into negative territory.
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