Tesla (TSLA) stock rose roughly 3.7% Friday as investors looked for signs of deescalation in the public spat between CEO Elon Musk and President Trump, which had prompted a washout erasing more than $150 billion in value from the EV maker a day earlier.
Spurring market optimism over easing tensions between the pair, the White House on Friday stood by its work with Musk and his highly controversial cost-cutting initiative, the Department of Government Efficiency (DOGE).
Trump’s “success through DOGE is undisputed, and his work will continue to yield historic results,” a White House spokesperson told the Wall Street Journal. Shares rose as much as 7% following the comment but pared gains later in the trading session.
Trump told ABC Friday morning that he was “not particularly” interested in speaking with the Tesla CEO, calling Musk “the man who has lost his mind.” Those comments came after White House aides told Politico that a call was scheduled between the two, sparking hopes for a potential truce.
Later on Friday, the New York Times, citing a senior White House official, said that the president had decided to sell his red Tesla.
On Thursday, the formerly close allies traded barbs on social media after Trump questioned whether their relationship remained in good standing, given Musk’s attacks this week on the “big, beautiful bill” currently making its way through Congress.
Tesla stock dropped over 14% on Thursday, erasing nearly all its post-election gains as the electric vehicle maker saw its largest single-day market cap loss in its history.
Read more about Tesla’s stock moves and today’s market action.
The loss came as Musk publicly supported a call for Trump’s impeachment and claimed the president “is in the Epstein files” on his social media platform X, referring to now-deceased convicted sex trafficker Jeffrey Epstein.
Trump fired back on his own social media platform, Truth Social, calling Musk “crazy” and threatening to terminate his companies’ government contracts. That was shortly after Trump remarked during a White House meeting with German Chancellor Friedrich Merz that he was “very disappointed in Elon.”
Musk replied by threatening to decommission his company SpaceX’s Dragon spacecraft, which is used by the US to shuttle American astronauts and cargo to and from space — a threat he later appeared to withdraw.
“The social media and war of words back and forth is not good for anyone and put massive pressure on Tesla shares with fears that Trump will turn from friend to foe and create a tough regulatory environment for Musk in the Beltway,” Wedbush analyst Dan Ives wrote in a note to investors Friday morning, adding, “We believe cooler heads will prevail today and into the weekend (hopefully)…”
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