Tesla shares rebounded sharply on Friday after White House officials reached out to Elon Musk, seeking to ease tensions between the Tesla CEO and U.S. President Donald Trump.
The move followed a bitter public spat between the two influential figures. Trump threatened to pull government contracts from Musk’s companies, while Musk went so far as to call for Trump’s impeachment.
Investors had watched the feud with growing alarm. Tesla’s stock had plummeted by more than 14% on Thursday, wiping out roughly $150 billion in market value in a single day. But by Friday morning, the mood had shifted. The stock rose around 5% in Frankfurt, as markets welcomed signs of a possible truce.
White House Tries to Calm the Waters
Sources close to the situation confirmed that White House aides arranged a call with Musk in hopes of de-escalating the row. While details of the conversation remain private, the outreach alone was enough to soothe market fears—for now.
“It’s unlikely that Trump will follow through on threats to cut subsidies or contracts with Tesla,” said Fiona Cincotta, a senior analyst at City Index. “This looks more like a war of words than a real policy shift.”
Others agreed, noting that while the headlines were dramatic, the underlying tensions might not amount to much. “Musk and Trump both know how to dominate the news cycle,” one veteran trader said. “But at the end of the day, there’s too much money at stake for either side to burn bridges completely.”
More Than Just Politics
Some analysts said the stock’s sharp fall on Thursday wasn’t just about politics.
“There’s a lot going on here,” said Garrett Nelson, senior equity analyst at CFRA Research. “The stock had surged after Tesla’s first-quarter earnings. Add to that ongoing market share losses in China and Europe, and you’ve got a shaky foundation.”
Nelson also pointed to next week’s highly anticipated Robotaxi launch in Austin. “Expectations may be too high,” he warned. “We’re holding our rating for now, but investors should brace for more ups and downs.”
Tesla remains one of the most watched companies on Wall Street. Though it’s slipped from the exclusive group of firms valued above $1 trillion, it’s still part of the so-called “Magnificent 7”—the seven most valuable tech giants.
Even so, it now sits ninth in the rankings, having been overtaken by Warren Buffett’s Berkshire Hathaway and chipmaker Broadcom.
Political Fallout Still Looms
The feud with Trump appears to have shaken confidence among some of Musk’s allies. Though the billionaire has had a complicated relationship with Washington, he’d previously avoided direct political clashes of this scale.
This latest fight, which played out largely on social media, marked a new level of hostility.
“It’s been messy,” said Kathleen Brooks, research director at XTB. “But there are early signs that Musk is open to cooling things down. That’s giving investors some reason to stay in the game.”
By Friday afternoon, U.S. stock futures had ticked up, with the S&P 500 pointing 0.4% higher—another sign that markets were breathing a little easier.
Still, some warn that the calm could be short-lived.
“This isn’t over,” one analyst said. “If either Musk or Trump takes another swing, all bets are off.”
For now, though, Wall Street appears willing to give peace a chance.
