Tesla’s stock price surged nearly 5% in Friday’s premarket trading, recovering from a sharp drop triggered by a public feud between CEO Elon Musk and former U.S. President Donald Trump. The rally followed reports of a scheduled call between Musk and White House officials aimed at easing tensions.

Market Volatility and Political Drama

Tesla shares fell more than 14% on Thursday, wiping out roughly $150 billion in market capitalization. The selloff followed Trump’s threats to withdraw federal contracts and subsidies supporting Musk’s companies, in response to Musk’s criticism of the administration’s spending policies.

Musk retaliated on X (formerly Twitter), accusing the administration of corruption and hinting at impeachment. This heated exchange caused significant volatility in Tesla stock and rattled investor confidence.

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The Source of the Feud

Reports of a White House call with Musk surfaced late Thursday, which helped calm investor nerves and fuel the 5% premarket rebound. Although details remain private, analysts believe the administration is working to stabilize the situation.

“While the rhetoric is strong, actual contract cancellations are unlikely,” said a Wedbush analyst. “This appears more political posturing than substantive policy change.”

Implications for Tesla and the Tech Sector

This incident highlights the vulnerability of tech companies reliant on government contracts and subsidies. Tesla’s electric vehicle credits and contracts with NASA and the U.S. military could face increased scrutiny amid political uncertainty.

The feud also underscores the risks of politicization as the 2025 election cycle progresses, potentially impacting the broader technology and clean energy sectors.

What Investors Should Know

  • Stock Price Movement: Tesla shares dropped over 14% on Thursday but recovered nearly 5% in premarket trading Friday (as of 8:30 AM ET).

  • Volatility Warning: Market reactions have been swift and emotional; investors should exercise caution.

  • No Investment Advice: This article does not constitute financial advice. Investors should consult professionals before making decisions.

Next Steps

Market participants will closely watch upcoming economic reports, including Friday’s U.S. jobs data, for further signals impacting market sentiment and Federal Reserve policy.

The evolving Trump-Musk saga remains a key risk factor for Tesla’s stock price and could influence sector-wide investor confidence.

Source: CNBC – Tesla jumps 5% in premarket trade as stock reels from Trump-Musk drama

This article is for informational purposes only and does not constitute investment advice. Readers should conduct their own research or consult financial advisors before making any investment decisions.