Tesla, Inc. (TSLA) Stock: Bounces Back Almost 5% After Musk-Trump Clash Triggers Selloff

TLDR;

Tesla shares rose 4.66 % in early trading Friday after plunging 14% Thursday. The Musk-Trump social media feud spooked investors, wiping $152 billion off Tesla’s value. Broader markets held steady, with tech-heavy Nasdaq modestly higher. Hopes for Tesla’s robotaxi launch helped fuel the rebound.

Tesla shares gained almost 5% in early trading Friday, recovering a portion of the historic plunge that followed a public feud between CEO Elon Musk and former President Donald Trump.

The stock had fallen 14% Thursday, its worst single-day loss this year, after Musk slammed Trump-backed budget cuts targeting clean energy, prompting a sharp rebuke from the former president.

The clash quickly became the center of attention across financial markets, dragging Tesla’s valuation below the $1 trillion mark and causing ripple effects throughout the tech sector. Musk and Trump continued exchanging barbs online throughout the day, deepening investor anxiety as Tesla’s price slid with every new post.

Tesla, Inc. (TSLA)

Wider Markets Hold Firm Despite Tesla Shock

Despite Tesla’s sharp downturn, the broader market showed resilience. Nasdaq futures rose 0.4% early Friday, while the S&P 500 gained 0.3% and the Dow Jones Industrial Average edged up by 0.2%. Analysts credited the overall market’s steadiness to optimism ahead of the May jobs report, which investors hope will clarify the Federal Reserve’s next steps.

On Thursday, however, Tesla’s crash did weigh on indexes. The Nasdaq Composite lost 0.8%, led lower by Tesla’s dramatic selloff. The S&P 500 slipped 0.5%, while the Dow — which does not include Tesla — managed to fall just 0.3%, showing how concentrated tech exposure amplified volatility.

Other major tech names, such as NVIDIA and Apple, saw modest declines as sentiment cooled in the wake of Tesla’s high-profile drama. The pressure on big tech underscores how influential Musk remains — not just as a CEO, but as a market mover capable of shaking investor confidence.

Robotaxi Launch Provides a Silver Lining

Friday’s gains suggest investors may be refocusing on fundamentals after Thursday’s political spectacle. Analysts are pointing to Tesla’s upcoming robotaxi launch in Austin, Texas, as a potential turning point. Musk has hinted that this initial rollout of fully autonomous vehicles could open the door to a new revenue stream, challenging traditional ride-sharing platforms.

While details remain limited, the market is watching closely. A successful pilot could inject fresh enthusiasm into Tesla’s long-term growth narrative, especially as its core EV business faces declining margins and intensifying competition.

Political Optics Add to Investor Caution

The White House has reportedly stepped in to arrange a call with Musk in an attempt to ease tensions and prevent further fallout. The budget dispute, centered on cuts to clean energy subsidies, has become more than just a policy disagreement. For investors, it raises questions about Tesla’s relationship with Washington at a time when federal support remains critical to EV expansion.

Musk’s unpredictable public persona, once seen as an asset, is increasingly viewed as a liability during turbulent market moments. For now, however, Friday’s modest rebound is offering some relief after a week defined by uncertainty.

That said, the coming days will test whether Tesla can shift attention back to innovation and performance. As broader markets await economic signals and Tesla eyes its robotaxi milestone, investors will be watching closely to see whether the company can regain its footing or remain caught in political crossfire.

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