US stocks fell Thursday as escalating tensions between President Trump and Tesla (TSLA) CEO Elon Musk overshadowed a phone conversation between Trump and China's Xi Jinping, which had lifted investor optimism that a strained US-China relationship could be thawing. The Dow Jones Industrial Average (^DJI) fell nearly 0.3%. The S&P 500 (^GSPC) was down more than 0.5%, and the tech-heavy Nasdaq Composite (^IXIC) slid over 0.8%.
Trump's spat with Musk burst into the open Thursday after days of Musk-led criticism of his giant tax-and-spending bill working its way through Congress. Trump posted on Truth Social that "the easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon’s Governmental Subsidies and Contracts." Tesla stock closed down by more than 14%, with losses escalating after Trump's apparent threat to Musk's businesses.
SNP – Delayed Quote • USD (^GSPC) View Quote Details 5,939.30 – (-0.53%) At close: June 5 at 4:42:09 PM EDT ^GSPC ^IXIC ^DJI Advanced Chart Earlier, just ahead of the market open, Trump confirmed a phone call with China's Xi after Chinese state media said the two leaders spoke on Thursday at Trump's request. "The call lasted approximately one and a half hours, and resulted in a very positive conclusion for both Countries," Trump wrote on social media on Thursday morning. "Our respective teams will be meeting shortly at a location to be determined."
Read more: The latest on Trump's tariffs Meanwhile, Department of Labor data out Thursday showed weekly claims for unemployment benefits hit their highest level in eight months during the final full week of May. Meanwhile, the tally of continuing claims continued to hover near the highest level in nearly four years, as the US labor market continues to show signs of slowing. Investors now await Friday's release of the closely watched May jobs report, which economists say will offer the "first real look at how the labor market is faring under a rapidly changing trade environment."
In other corporate news, shares of stablecoin firm Circle (CRCL) exploded higher in its market debut. LIVE COVERAGE IS OVER 21 updates
