Closing Recap

U.S. stocks finished mostly lower after a late-day slide driven by a sharp drop in Tesla shares following a public dispute between CEO Elon Musk and President Trump; positive U.S.-China trade talk headlines provided early support, while gold eased, oil gained, and the dollar recovered from lows. 

Key Takeaways 

• Late Tesla Slide Hits Markets: Stocks gave back afternoon gains and turned mostly negative after Tesla (TSLA) shares plunged (-18% at lows) amid a heated social media exchange between Elon Musk and President Trump over the new tax bill. 
• U.S.-China Trade Talk Optimism: Markets initially firmed on President Trump’s positive comments about a “very good phone call” with Chinese President Xi, detailing upcoming trade talks and a potential visit. 
• Economic Data Mixed: Jobless claims rose to 8-month highs, and Q1 Unit Labor Costs were revised sharply higher (worst productivity since Q2’22), while the April trade deficit narrowed significantly. 
• Circle IPO Surges: Cryptocurrency company Circle Internet (CRCL) nearly tripled in its IPO, a notable market event. 
• Gold Eases, Oil Gains: Gold prices pulled back slightly, while oil prices edged higher on U.S.-China trade talk progress. Silver outperformed, hitting 13-year highs. 
• Dollar Recovers, Yields Rise: The U.S. dollar pared sharp early losses to finish near unchanged, while Treasury yields ticked higher. 
• Focus on Jobs Report: Markets now await today’s crucial May Nonfarm Payrolls report. 

Market Overview 

U.S. equity markets experienced a volatile session, ultimately finishing mostly in negative territory as a sharp late-afternoon plunge in Tesla (TSLA) shares overshadowed earlier optimism from positive U.S.-China trade developments. Stocks had been holding steady to slightly higher for much of the day, supported by President Trump’s detailed account on Truth Social of a “very good phone call” with Chinese President Xi, which he said resulted in a “very positive conclusion for both Countries” regarding their trade deal. Trump announced that respective trade teams would be meeting shortly and even mentioned reciprocal invitations for state visits. 

Index	Up/Down	% Change	Last
DJ Industrials	-108	-0.0025	42319
S&P 500	-31.5	-0.0053	5939
Nasdaq	-162.04	-0.0083	19298
Russell 2000	-1.13	-0.0005	2097

However, the market narrative took a dramatic turn in the afternoon due to a very public and acrimonious dispute between Tesla CEO Elon Musk and President Trump concerning the recently House-passed tax bill. Musk’s criticism of the bill and Trump’s subsequent sharp rebuke, which included threats against Tesla, sent TSLA shares tumbling as much as 18% at one point, dragging down the S&P 500 and Nasdaq. This overshadowed a day that otherwise focused on trade progress and a mixed bag of economic data. Weekly jobless claims rose to 8-month highs, and revised Q1 unit labor costs surged, indicating sharply worsening productivity. Conversely, the April trade deficit narrowed dramatically to its lowest level since September 2023, largely due to a significant drop in imports from China. In other notable news, cryptocurrency company Circle Internet (CRCL) saw its shares nearly triple in a strong IPO debut.

Economic Data

Economic data yesterday was mixed, with a sharp narrowing of the trade deficit contrasting with rising jobless claims and concerning revisions to Q1 labor costs/productivity. 

• Weekly Jobless Claims: Rose to 247,000 (8-month high) from 239,000 prior, above the 235,000 consensus. Continuing claims fell slightly to 1.904 million. 
• Q1 Non-Farm Unit Labor Costs (Revised): Surged +6.6% (vs. +5.7% consensus and +5.7% previous). Q1 Non-Farm Productivity revised lower to -1.5% (vs. -0.8% consensus and -0.8% previous), marking the worst reading since Q2’22. 
• U.S. Trade Deficit (Apr): Narrowed significantly to −$61.6 billion, the lowest since September 2023, and well below the −$70.0 billion consensus and March’s −$138.3 billion. Exports rose 3.0%, while imports fell 16.3%. Imports from China dropped to their lowest level since March 2020. 

Commodities, Currencies, and Treasuries 

Gold prices eased slightly, with August futures falling $24.10 (-0.71%) to settle at $3,375.10 per ounce, consolidating after recent strong gains. Silver, however, outperformed, with July futures hitting 13-year highs. Crude oil prices edged higher, with WTI gaining $0.52 (+0.83%) to settle at $63.37/bbl. The gains were attributed to renewed optimism on U.S.-China trade talks following the positive call between Presidents Trump and Xi. Bitcoin prices fell sharply from recent all-time highs, dropping below $102,000 late in the day. The U.S. dollar index pared sharp early losses to finish near unchanged around 98.80, after initially falling on trade optimism. The Euro neared $1.15 before also paring gains. Treasury yields ticked higher, with the 10-year yield rising about 2.6 basis points to 4.391%.

Asset	Up/Down	Unit / % Change	Last
WTI Crude	0.52	USD/bbl	63.37
Brent	0.48	USD/bbl	65.34
Gold	-24.1	USD/oz	3375.1
EUR/USD	0.0018	USD	1.1435
USD/JPY	0.95	JPY	143.73
10-Year Note	0.026	%	0.04391

Looking Ahead 

All eyes now turn to tomorrow morning’s May Nonfarm Payrolls report, which will be a critical data point for assessing the health of the U.S. labor market and potentially influencing Federal Reserve policy expectations. The market will also be watching for any fallout or further developments from the public dispute between Elon Musk and President Trump, and its impact on Tesla and related sectors. While U.S.-China trade talk headlines were positive today, the market remains highly sensitive to any shifts in rhetoric or perceived progress. The strong performance of the Circle IPO may also influence sentiment towards new listings.