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Tesla shares fall as growing Trump-Musk spat rattles investors

Tesla shares fall as growing Trump-Musk spat rattles investors

Qatar Tribune05-06-2025

Agencies
New York
Cracks in the relationship between President Donald Trump and Tesla CEO Elon Musk, his self-proclaimed 'First Buddy', are scaring Tesla shareholders as the two fired salvos at each other in increasingly heated rhetoric on Thursday.
Shares fell more than 8 percent on Thursday on a day otherwise devoid of news for the electric automaker, as traders dumped the stock in heavy trading after Musk stepped up his criticism of the president's tax bill.
Trump fired back, alleging Musk was upset because the bill takes away tax benefits for electric vehicle purchases, while investors feared their souring relationship could hurt Musk's sprawling business empire.
'Look, Elon and I had a great relationship. I don't know if we will anymore,' Trump said. 'He said the most beautiful things about me. And he hasn't said bad about me personally. That'll be next. But I'm very disappointed.'
Musk, the world's richest man and a key figure in the Department of Government Efficiency's (DOGE) cost-cutting plan for several months, has blasted the bill, after he decided to spend less time in the White House and instead focus on his companies.
On his social media platform X, Musk has called on Congress members to kill the legislation, calling it a 'disgusting abomination'.
'It more than defeats all the cost savings achieved by the DOGE team at great personal cost and risk,' Musk, the largest Republican donor in the 2024 election campaign, said on X on Tuesday.
Musk's leadership of DOGE and his alignment with the Trump administration had put off some Tesla buyers. Sales of his EVs slumped in Europe, China and key US markets like California, even as overall electric vehicle purchases continue to grow.
Musk has slowly started to separate himself from the White House in recent weeks, stung in part by the wave of protests against Tesla.
'Elon's politics continue to harm the stock. First he aligned himself with Trump which upset many potential Democratic buyers. Now he has turned on the Trump administration,' said Tesla shareholder Dennis Dick, chief strategist at Stock Trader Network.
The ECB cut its deposit rate from 2.25 percent to 2 percent.
Musk's other businesses, SpaceX and Starlink, dominate their respective markets, but have also come under scrutiny due to Musk's relationship with Trump.
Those two businesses often serve as the default choice for commercial launches and satellite internet deployment, and foreign governments have increasingly looked to Starlink, with regulatory approvals smoothed by Musk's ties.
Tesla shares are down 12 percent since May 27, roughly coinciding with his decision to pull back from Washington activities. Losses accelerated on Thursday as 100 million shares changed hands, roughly the daily volume over the last 100 days.
The stock has been on a roller-coaster ever since Musk endorsed Trump in mid-July 2024 in his re-election bid, gaining 169% from that point through mid-December. That was followed by a 54 percent slide through early April as a 'Tesla Takedown' protest intensified.
The House of Representatives version of the budget bill proposes largely ending the popular $7,500 EV subsidy by the end of 2025. Tesla and other automakers have relied on incentives for years to drum up demand, but Trump promised during the transition to end the subsidy.
Tesla could face a $1.2 billion hit to its annual profit, along with an additional $2 billion setback to regulatory credit sales due to separate Senate legislation targeting California's EV sales mandates, according to JP Morgan analysts.
'The budget bill contains bad stuff for Tesla with the end of the EV credits, and just generally his falling out with Trump has risks for Tesla and Elon's other companies,' said Jed Ellerbroek, portfolio manager at Argent Capital Management.
Musk's public attacks have upset potential Republican Tesla buyers as well, Dennis Dick said. One White House official on Wednesday called the Tesla CEO's moves 'infuriating.'
The billionaire joined Senate Republican deficit hawks this week to argue that the House bill does not go far enough in reducing spending.
Overall, Tesla shares are down 22 percent this year, including Thursday's losses. But the company is still the most valuable automaker worldwide by a long shot - carrying a market value of $1 trillion, way above Toyota Motor's nearly $290 billion.
Tesla trades at 140.21 times profit estimates, a steep premium to other Big Tech stocks such as Nvidia.

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History of US-Iran relations: From the 1953 regime change to Trump strikes
History of US-Iran relations: From the 1953 regime change to Trump strikes

Al Jazeera

time4 hours ago

  • Al Jazeera

History of US-Iran relations: From the 1953 regime change to Trump strikes

Here's a timeline of US-Iran relations since 1953: United States-Iran tensions have surged to the highest point in decades after President Donald Trump on Sunday ordered direct strikes that he said 'obliterated' key nuclear facilities across the Middle Eastern country. Iran remains the biggest adversary of the US in the region since the 1979 Islamic revolution led by Ayatollah Ruhollah Khomeini toppled pro-Western Mohammad Reza Pahlavi. Since then, the two nations have sparred over a multitude of issues, including Iran's nuclear ambitions, Iran's backing of proxies in the region, and US political interference. Israel, which has long considered Iran a threat, launched unprecedented strikes across Iran last week after accusing the country of developing nuclear weapons. Israeli claims have not been backed by any credible proof, but Trump dragged the US into the war following the Israeli strikes. On Sunday, the US directly hit Iran in what the Trump administration called a highly sophisticated covert attack that involved more than 125 US aircraft and 75 precision bombs. Washington said it 'devastated' Iran's nuclear sites, but Tehran has warned it will retaliate. (1953) US-backed coup and reinstallation of the shah: Tensions initially began brewing over the democratically elected Iranian Prime Minister Mohammad Mosaddegh's efforts to nationalise the Anglo-Iranian Oil Company (now BP). The British colonial power controlled the majority stake in the joint-venture company since oil was discovered in the early 1900s. Mosaddegh's moves to nationalise the company after his 1951 election angered the British. The US's Central Intelligence Agency supported the United Kingdom in engineering a coup and backing once-deposed monarch, Pahlavi, back into power as shah. (1957) Atoms for Peace: The shah's ambitions for a nuclear-powered Iran gained support from the US and other Western allies. Both countries signed a nuclear agreement for the civilian use of nuclear power as part of then-US President Dwight D Eisenhower's Atoms for Peace programme. A decade later, the US provided Iran with a nuclear reactor and uranium to fuel it. The nuclear collaboration forms the basis for the current nuclear question. (1979) Islamic revolution: While relations between Tehran and Washington flourished, Iranians groaned under the dictatorship of the shah and resisted the perceived overreach of Western influence on their business. Revolutionary protests began rocking the country in late 1978 and forced the shah to flee in January 1979. Exiled Islamic scholar Ayatollah Ruhollah Khomeini returned to rule the new Islamic republic. (1980) US cuts diplomatic ties: Following the US's move to admit the shah for cancer treatment after his exile, Iranian students broke into the US embassy in Tehran and kidnapped 52 Americans for 444 days. Washington cut off diplomatic ties and imposed sanctions on the country. The shah died in exile. (1980-88) US backs Iraqi invasion: Following Iraq's invasion of Iran under Saddam Hussein, who was eager to push back against Khomeini's ideology, the US sided with Iraq, deepening tensions between the two nations. The war lasted till 1988 and saw thousands die on both sides. Iraq also used chemical weapons on Iran. (1984) Sponsor of terror designation: President Ronald Reagan officially designated Iran as a 'state sponsor of terror' after a series of attacks in Lebanon, where the US had been drawn in after Israel invaded the country. In one attack on a military base in Beirut, 241 US service members were killed. The US blamed Hezbollah, a Lebanese Shia movement backed by Iran. Later, though, Reagan worked with Iran behind the scenes to free American hostages held by Hezbollah. When it came to light, the Iran-Contra affair, as it was termed, was a huge scandal for Reagan. (1988) Iran Air flight shot down: Amid war tensions and even direct attacks on each other's military warships in the Gulf, a US naval ship breached Iranian waters and fired at the civilian Iran Air flight (IR655) headed to Dubai on July 8. All 290 people on board were killed. The US, which claimed it was a mistake, did not formally apologise or claim responsibility but paid families $61.8m as compensation. (1995) Tighter sanctions: Between 1995 and 1996, the US imposed more sanctions. Then, President Bill Clinton's executive orders banned US companies from dealing with Iran, while Congress passed a law penalising foreign entities investing in the country's energy sector or selling Iran advanced weapons. The US cited nuclear advancement and support of groups like Hezbollah, Hamas, and Palestinian Islamic Jihad. (2002) 9/11 aftermath: Following the 9/11 attacks on the US, President George W Bush, in a State of the Union address, said Iran was part of an 'Axis of Evil' alongside Iraq and North Korea. At the time, Iran had been parlaying with the US behind the scenes to target their mutual foes – the Taliban in Afghanistan and al-Qaeda. The cooperation was soured, and by the end of 2022, international observers noted highly enriched uranium in Iran, inviting more sanctions. (2013) Iran nuclear deal: Between 2013 and 2015, US President Barack Obama began high-level talks with Iran. In 2015, Tehran agreed to the nuclear deal, formally known as the Joint Comprehensive Plan of Action (JCPOA), that would limit Iran's nuclear activities in exchange for an easing of sanctions. China, Russia, France, Germany, the UK and the European Union were also party to the deal that capped Iran's enrichment at 3.67 percent. (2018) Trump withdraws from the nuclear deal: Under Trump's first term, the US unilaterally withdrew from the deal in 2018 and slapped back sanctions against Iran. Trump and Israel had been critical of the deal. Iran also called off its commitments and began producing enriched uranium beyond the limits the deal had imposed. (2020) IRGC leader assassinated: During Trump's first term, the US killed Iranian General Qassem Soleimani, the head of the elite Quds Force of Iran's Islamic Revolutionary Guard Corps (IRGC), in Baghdad in a drone strike. A year earlier, the administration had named the Quds Force a 'terrorist' organisation. Iran responded with strikes on US assets in Iraq. (2025) Letter to Tehran: In March, Trump shot off a letter to Iran's Supreme Leader Ayatollah Ali Khamenei proposing new negotiations on a nuclear deal with a deadline of 60 days. But Khamenei rejected the offer, saying the US is not seeking negotiations with Iran but rather imposing demands on it. Talks started unofficially in Oman and Italy, with Muscat acting as the mediator. Trump claimed his team was 'very close' to a deal after several rounds of talks and warned Israel against strikes. Tehran, too, expressed optimism but insisted on the right to enrich uranium – a sticking point in the talks. Israel launched strikes across Iran a day before the sixth round of the Iran-US talks. (2025) US strikes: The US bombed three key nuclear facilities in Iran, citing security concerns and the defence of Israel.

A brief history of US-Iran ties: From 1953 regime change to Trump strikes
A brief history of US-Iran ties: From 1953 regime change to Trump strikes

Al Jazeera

time5 hours ago

  • Al Jazeera

A brief history of US-Iran ties: From 1953 regime change to Trump strikes

Here's a timeline of US-Iran relations since 1953: United States-Iran tensions have surged to the highest point in decades after President Donald Trump on Sunday ordered direct strikes that he said 'obliterated' key nuclear facilities across the Middle Eastern country. Iran remains the biggest adversary of the US in the region since the 1979 Islamic revolution led by Ayatollah Ruhollah Khomeini toppled pro-Western Mohammad Reza Pahlavi. Since then, the two nations have sparred over a multitude of issues, including Iran's nuclear ambitions, Iran's backing of proxies in the region, and US political interference. Israel, which has long considered Iran a threat, launched unprecedented strikes across Iran last week after accusing the country of developing nuclear weapons. Israeli claims have not been backed by any credible proof, but Trump dragged the US into the war following the Israeli strikes. On Sunday, the US directly hit Iran in what the Trump administration called a highly sophisticated covert attack that involved more than 125 US aircraft and 75 precision bombs. Washington said it 'devastated' Iran's nuclear sites, but Tehran has warned it will retaliate. (1953) US-backed coup and reinstallation of the shah: Tensions initially began brewing over the democratically elected Iranian Prime Minister Mohammad Mosaddegh's efforts to nationalise the Anglo-Iranian Oil Company (now BP). The British colonial power controlled the majority stake in the joint-venture company since oil was discovered in the early 1900s. Mosaddegh's moves to nationalise the company after his 1951 election angered the British. The US's Central Intelligence Agency supported the United Kingdom in engineering a coup and backing once-deposed monarch, Pahlavi, back into power as shah. (1957) Atoms for Peace: The shah's ambitions for a nuclear-powered Iran gained support from the US and other Western allies. Both countries signed a nuclear agreement for the civilian use of nuclear power as part of then-US President Dwight D Eisenhower's Atoms for Peace programme. A decade later, the US provided Iran with a nuclear reactor and uranium to fuel it. The nuclear collaboration forms the basis for the current nuclear question. (1979) Islamic revolution: While relations between Tehran and Washington flourished, Iranians groaned under the dictatorship of the shah and resisted the perceived overreach of Western influence on their business. Revolutionary protests began rocking the country in late 1978 and forced the shah to flee in January 1979. Exiled Islamic scholar Ayatollah Ruhollah Khomeini returned to rule the new Islamic republic. (1980) US cuts diplomatic ties: Following the US's move to admit the shah for cancer treatment after his exile, Iranian students broke into the US embassy in Tehran and kidnapped 52 Americans for 444 days. Washington cut off diplomatic ties and imposed sanctions on the country. The shah died in exile. (1980-88) US backs Iraqi invasion: Following Iraq's invasion of Iran under Saddam Hussein, who was eager to push back against Khomeini's ideology, the US sided with Iraq, deepening tensions between the two nations. The war lasted till 1988 and saw thousands die on both sides. Iraq also used chemical weapons on Iran. (1984) Sponsor of terror designation: President Ronald Reagan officially designated Iran as a 'state sponsor of terror' after a series of attacks in Lebanon, where the US had been drawn in after Israel invaded the country. In one attack on a military base in Beirut, 241 US service members were killed. The US blamed Hezbollah, a Lebanese Shia movement backed by Iran. Later, though, Reagan worked with Iran behind the scenes to free American hostages held by Hezbollah. When it came to light, the Iran-Contra affair, as it was termed, was a huge scandal for Reagan. (1988) Iran Air flight shot down: Amid war tensions and even direct attacks on each other's military warships in the Gulf, a US naval ship breached Iranian waters and fired at the civilian Iran Air flight (IR655) headed to Dubai on July 8. All 290 people on board were killed. The US, which claimed it was a mistake, did not formally apologise or claim responsibility but paid families $61.8m as compensation. (1995) Tighter sanctions: Between 1995 and 1996, the US imposed more sanctions. Then, President Bill Clinton's executive orders banned US companies from dealing with Iran, while Congress passed a law penalising foreign entities investing in the country's energy sector or selling Iran advanced weapons. The US cited nuclear advancement and support of groups like Hezbollah, Hamas, and Palestinian Islamic Jihad. (2002) 9/11 aftermath: Following the 9/11 attacks on the US, President George W Bush, in a State of the Union address, said Iran was part of an 'Axis of Evil' alongside Iraq and North Korea. At the time, Iran had been parlaying with the US behind the scenes to target their mutual foes – the Taliban in Afghanistan and al-Qaeda. The cooperation was soured, and by the end of 2022, international observers noted highly enriched uranium in Iran, inviting more sanctions. (2013) Iran nuclear deal: Between 2013 and 2015, US President Barack Obama began high-level talks with Iran. In 2015, Tehran agreed to the nuclear deal, formally known as the Joint Comprehensive Plan of Action (JCPOA), that would limit Iran's nuclear activities in exchange for an easing of sanctions. China, Russia, France, Germany, the UK and the European Union were also party to the deal that capped Iran's enrichment at 3.67 percent. (2018) Trump withdraws from the nuclear deal: Under Trump's first term, the US unilaterally withdrew from the deal in 2018 and slapped back sanctions against Iran. Trump and Israel had been critical of the deal. Iran also called off its commitments and began producing enriched uranium beyond the limits the deal had imposed. (2020) IRGC leader assassinated: During Trump's first term, the US killed Iranian General Qassem Soleimani, the head of the elite Quds Force of Iran's Islamic Revolutionary Guard Corps (IRGC), in Baghdad in a drone strike. A year earlier, the administration had named the Quds Force a 'terrorist' organisation. Iran responded with strikes on US assets in Iraq. (2025) Letter to Tehran: In March, Trump shot off a letter to Iran's Supreme Leader Ayatollah Ali Khamenei proposing new negotiations on a nuclear deal with a deadline of 60 days. But Khamenei rejected the offer, saying the US is not seeking negotiations with Iran but rather imposing demands on it. Talks started unofficially in Oman and Italy, with Muscat acting as the mediator. Trump claimed his team was 'very close' to a deal after several rounds of talks and warned Israel against strikes. Tehran, too, expressed optimism but insisted on the right to enrich uranium – a sticking point in the talks. Israel launched strikes across Iran a day before the sixth round of the Iran-US talks. (2025) US strikes: The US bombed three key nuclear facilities in Iran, citing security concerns and the defence of Israel.

Investors brace for more oil price spikes as United States bombs Iran sites
Investors brace for more oil price spikes as United States bombs Iran sites

Qatar Tribune

time12 hours ago

  • Qatar Tribune

Investors brace for more oil price spikes as United States bombs Iran sites

Agencies AU.S. attack on Iranian nuclear sites could push oil prices even more and trigger an automatic rush to safety, investors said, as they assessed how the latest escalation of tensions would ripple through the global economy. The reaction in Middle East stock markets, which trade on Sunday, suggested investors were assuming a benign scenario, even as Iran intensified its missile attacks on Israel in response to the sudden, deep U.S. involvement in the conflict. Trump called the attack 'a spectacular military success' in a televised address to the nation and said Iran's 'key nuclear enrichment facilities have been completely and totally obliterated.' He said the U.S. military could go after other targets in Iran if the country did not agree to peace. Iran said it reserves all options to defend itself, and warned of 'everlasting consequences.' Investors said they expected the U.S. involvement would cause a sell-off in stock markets and a possible bid for the dollar and other safe-haven assets when major markets reopen, but also said much uncertainty about the course of the conflict remained. 'I think the markets are going to be initially alarmed, and I think oil will open higher,' said Mark Spindel, chief investment officer at Potomac River Capital. 'We don't have any damage assessment and that will take some time. Even though he has described this as 'done', we're engaged. What comes next?' Spindel said. 'I think the uncertainty is going to blanket the markets, as now Americans everywhere are going to be exposed. It's going to raise uncertainty and volatility, particularly in oil,' he added. One indicator of how markets will react in the coming week was the price of ether, the second-largest cryptocurrency and the new gauge of retail investor sentiment after bitcoin, which is now held largely by institutions. Ether was down 5% on Sunday, taking losses since the first Israeli strikes on Iran on June 13 to 13%. Most Gulf stock markets, however, seemed unconcerned by the early morning attacks, with the main indexes in Saudi Arabia and Kuwait up slightly and Israel's Tel Aviv main index at an all-time high. A key concern for markets would center around the potential impact of the developments in the Middle East on oil prices and thus on inflation. A rise in inflation could dampen consumer confidence and lessen the chance of near-term interest rate cuts. Saul Kavonic, a senior energy analyst at equity research firm MST Marquee in Sydney, said the more likely scenario would see Iran respond by targeting American interests in the Middle East, including Gulf oil infrastructure in places such as Iraq or harassing ship passages through the Strait of Hormuz. The Strait of Hormuz lies between Oman and Iran and is the primary export route for oil producers such as Saudi Arabia, the United Arab Emirates (UAE), Iraq and Kuwait. 'Much depends on how Iran responds in the coming hours and days, but this could set us on a path towards $100 oil if Iran respond as they have previously threatened to,' Kavonic said. While global benchmark Brent crude futures have risen as much as 18% since June 10, hitting a near five-month high of $79.04 on Thursday, the S&P 500 has been little changed, following an initial drop when Israel launched its attacks on Iran on June 13. In comments after Trump announced the strikes, Jamie Cox, managing partner at Harris Financial Group, agreed oil prices would likely spike on the initial news. But Cox said he expected prices to likely level off in a few days as the attacks could lead Iran to seek a peace deal with Israel and the U.S. 'With this demonstration of force and total annihilation of its nuclear capabilities, they've lost all of their leverage and will likely hit the escape button to a peace deal,' Cox said. Economists warn that a dramatic rise in oil prices could damage a global economy already strained by Trump's tariffs. Still, any pullback in equities might be fleeting, history suggests. During past prominent instances of Middle East tensions coming to a boil, including the 2003 Iraq invasion and the 2019 attacks on Saudi oil facilities, stocks initially languished but soon recovered to trade higher in the months ahead. On average, the S&P 500 slipped 0.3% in the three weeks following the start of the conflict, but was 2.3% higher on average two months following the conflict, according to data from Wedbush Securities and CapIQ Pro. An escalation in the conflict could have mixed implications for the U.S. dollar, which has tumbled this year amid worries over diminished U.S. exceptionalism. In the event of U.S. direct engagement in the Iran-Israel war, the dollar could initially benefit from a safety bid, analysts said. 'Do we see a flight to safety? That would signal yields going lower and the dollar getting stronger,' said Steve Sosnick, chief market strategist at IBKR in Greenwich, Connecticut. 'It's hard to imagine stocks not reacting negatively and the question is how much. It will depend on Iranian reaction and whether oil prices spike.'

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