Quick overview

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U.S. stock indexes ended Thursday in the red as investors reacted to a jump in weekly jobless claims and a dramatic 14.26% drop in Tesla shares, triggered by an escalating public feud between CEO Elon Musk and former President Donald Trump.

All three major Wall Street indexes posted losses. The Dow Jones Industrial Average, which tracks 30 blue-chip companies, fell 0.25% to 42,319.74 points. The S&P 500, comprising the largest U.S. companies, dropped 0.53% to 5,939.30. The tech-heavy Nasdaq Composite led declines, losing 0.83% to close at 19,298.45.

Jobless Claims Weigh on Sentiment

Investors were rattled by new U.S. labor market data showing an unexpected rise in jobless claims. Weekly initial unemployment filings rose by 8,000 to a total of 247,000 for the week ending May 31—exceeding the 235,000 forecast by analysts.

Tesla Tumbles Amid Musk–Trump Clash

Tesla shares plummeted 14.26% after former President Trump said he was “very disappointed” with Elon Musk. Musk fired back on X, claiming that Trump would have lost the election without his support.

The spat turned personal when Trump referred to Musk as “crazy” and threatened to cancel all federal contracts tied to Musk’s companies. In retaliation, Musk posted that Trump appears in documents related to Jeffrey Epstein’s associates.

U.S.–China Call Fails to Move Markets

Markets also initially responded positively to news that Trump had a phone call with Chinese President Xi Jinping to discuss trade issues. However, the optimism faded as no concrete developments were announced following the conversation.

Sector Breakdown and Additional Fed Remarks

Of the S&P 500’s 11 sectors, only communication services ended in the green. Consumer discretionary posted the steepest losses, dragged down by Tesla. Within the Dow Jones, Procter & Gamble (-1.90%) and Walmart (-1.42%) were among the biggest decliners.

Fed Official Warns on Tariff-Driven Inflation

Jeff Schmid, President of the Kansas City Federal Reserve Bank, voiced concern Thursday that new tariffs could reignite inflation. He warned that while price pressures may become visible in the near term, the full impact might take longer to materialize.

Schmid’s comments suggest he may support holding interest rates steady not only at the upcoming June 17–18 FOMC meeting but potentially for an extended period. His position reflects a cautious approach to ensure inflation—which is currently hovering near the Fed’s 2% target—does not spiral out of control.