US Labor Market Shows Resilience, Tesla Slumps After Trump-Musk Feud: This Week In Markets
The U.S. labor market showed resilience with May's nonfarm payrolls adding 139,000 jobs, surpassing expectations. Wage growth also exceeded forecasts, while the unemployment rate held steady at 4.2%. President Trump praised the report but urged the Fed to lower interest rates. Meanwhile, a public feud between Trump and Musk over a tax bill led to a 14% drop in Tesla's stock, erasing $152 billion in market value. The S&P 500 gained 1.5% for the week, closing at 6,000 points.
Despite fears of a sharp slowdown in the labor market, the official nonfarm payrolls report for May showed stronger-than-expected job growth, underscoring the resilience of the U.S. economy amid macroeconomic uncertainties.
The economy added 139,000 nonfarm payrolls in May, beating expectations of 130,000 yet cooling from the previous 147,000. Wage growth also exceeded expectations, with average hourly earnings rising 0.4% month over month and 3.9% year over year. The unemployment rate remained steady at 4.2%.
President Donald Trump celebrated the strong May jobs report, calling the figures "great numbers," while renewing his public pressure on Fed Chair Jerome Powell, urging him to lower interest rates.
According to Trump, borrowing costs should be "much lower" as they are costing the U.S. economy "a fortune," suggesting the need to refinance maturing debt.
His remarks came after the Congressional Budget Office released updated estimates for Trump's sweeping tax bill, which is projected to add $2.4 trillion to the federal deficit over the next decade.
Political Spat Between Trump And Musk Hits Tesla Stock
A clash between Elon Musk and Trump erupted on Thursday after the tech billionaire publicly slammed the tax bill, claiming it was pushed through Congress too fast and never shared with him during his brief tenure as head of the Department of Government Efficiency.
Musk advocated for a leaner federal budget and accused the legislation of reckless spending.
Trump claimed Musk had gone crazy after losing access to government electric vehicle mandates. The president also floated the idea of scrapping all government contracts with Musk's companies, including SpaceX and Starlink, as a cost-saving measure for the budget.
Tensions reached a boiling point when Musk posted: "Time to drop the really big bomb: Trump is in the Epstein files. That is the real reason they have not been made public," yet offering no evidence to support the claim.
The feud sent shockwaves through markets, triggering Tesla Inc.‘s TSLA worst trading session of the year. Shares tumbled 14% on Thursday, erasing $152 billion in market value and capping a brutal week of double-digit losses.
On Friday, the S&P 500 – tracked by the SPDR S&P 500 ETF Trust SPY – closed at 6,000 points, gaining 1.5% for the week.
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Image created using artificial intelligence via Midjourney.
