The public feud between Donald Trump and Elon Musk just wiped out billions in market value—and could signal deeper trouble ahead for Tesla and the tech-heavy Nasdaq.

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In a dramatic escalation, Trump on Thursday threatened to cancel government contracts with Musk-owned companies, fuelling a market sell-off that saw Tesla plunge 14.3%, wiping out roughly $150 billion in value. Trump Media & Technology Group, which trades under the DJT ticker, also fell more than 8%. The Nasdaq closed down 0.8%.

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The clash marks a spectacular breakdown in the once-amicable relationship between the U.S. President and the world’s richest man, with analysts now fearing that regulatory and political headwinds could hit Tesla’s long-term prospects—especially in areas like autonomous driving.

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“Investors fear that this Musk–Trump battle will stop their friendship and change the regulatory environment,” Wedbush analysts wrote. “It’s another Twilight Zone moment.”

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Why Are They Fighting?

The rift appears to be driven by policy disagreements—including over EV tax credits and government spending—and possibly by Musk’s recent remarks criticising the administration’s economic agenda.

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Trump has reportedly grown frustrated with Musk’s vocal opposition to parts of the White House’s fiscal strategy, including a slimmed-down version of Trump’s “big beautiful” stimulus bill.

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Others speculate the feud may also be a distraction from Musk’s own issues, including controversies surrounding Dogecoin and the financial viability of Tesla in an increasingly competitive EV market.

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What’s At Stake

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Tesla is now in the crosshairs of a potentially hostile administration. While the company has enjoyed years of favourable treatment from both parties—subsidies, contracts, regulatory leniency—Trump’s latest threat could change that.

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“Elon Musk has a big mouth, a lot of influence,” said Crossmark CEO Bob Doll. “He’s going to embolden some Republican reps to question the bill.”

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Juan Perez of Monex said the spat reflects a broader “rethink of global power dynamics,” noting that both figures have championed deregulation, but now diverge over what “efficiency” means in practice.

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Market Shrugs, For Now

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While the feud sent shockwaves through Tesla and DJT stock, broader markets held steady. The Nasdaq dipped modestly, and analysts say the fallout may be contained to the companies directly involved.

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Still, the drama raises new questions about the intersection of political power, billionaire influence, and stock market volatility—especially with Trump back in the White House and Musk more politically engaged than ever.

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As one investor put it: “Live by the meme vibe, die by the meme vibe.”‎

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