LIVE MARKETS-US stocks drop as Trump, Musk feud in public

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U.S. STOCKS DROP AS TRUMP, MUSK FEUD IN PUBLIC

U.S. stocks dropped on Thursday and Tesla shares TSLA.O tumbled 14% as U.S. President Donald Trump and billionaire Elon Musk took what appeared to be a simmering feud public, with Trump threatening to terminate U.S. contracts and subsidies with Musk's companies.

Musk has been increasingly critical of a Trump-endorsed tax and spending bill in Congress that if passed in its current form is expected to increase the U.S. debt load by trillions over the coming decade.

In an escalating war of words on Thursday Trump responded by threatening to pull government support for Musk's companies.

Stocks had been boosted earlier by optimism over a trade deal between the United States and China.

Trump and Chinese leader Xi Jinping held a rare leader-to-leader call and the heads of state also invited each other to visit their respective countries. Trump said there would be further lower-level U.S.-China discussions and added that "there should no longer be any questions respecting the complexity of Rare Earth products."

Investors are next focused on Friday’s jobs report for May for any signs of slowing. The U.S. labor market has remained resilient in recent months despite concerns that tariffs will dent hiring and increase layoffs. The government has also cut jobs as part of DOGE efforts to reduce the deficit.

Data on Thursday showed that the number of Americans filing new applications for unemployment benefits increased to a seven-month high last week.

The Nasdaq Composite .IXIC was the worst performing major index, dropping 0.83%, the S&P 500 .SPX and the Dow Jones Industrial Average .DJI fell 0.53% and 0.25%, respectively. Consumer discretionary .SPLRCD led sector losses, ending down 2.47%.

Here is Thursday’s closing market snapshot:

(Karen Brettell)

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