Pre-Market Pulse 6th June – Investors re-think optimism as Trump and Elon “feud” escalates

Overnight – Investors re-think optimism as Trump and Elon “feud” escalates

Stocks headed lower overnight as investors weighed up whether it’s smart to be optimistic about the US President after very public fallout between the President and Elon Musk and a “positive” US-China call on trade that either side refused to release details about

Tesla shares plunged over 14% as tensions between CEO Elon Musk and former President Donald Trump escalated. The fallout began when Trump expressed disappointment with Musk following the Tesla chief’s public criticism of Trump’s legislative initiatives, prompting Musk to retort that Trump would have lost without his support. The previously close political alignment between Musk and Trump had been seen as beneficial for Tesla, but the recent public spat has negatively impacted investor sentiment.

In other major developments, President Trump and Chinese President Xi Jinping held a constructive 90-minute phone call focused on trade, particularly rare earth exports. Both leaders agreed to resume trade negotiations, with high-level U.S. officials set to meet their Chinese counterparts. The call was described as positive, with Trump emphasizing that the discussion was limited to trade issues, and invitations for state visits were exchanged, signalling a potential thaw in U.S.-China economic relations.

Meanwhile, US labour market data showed signs of cooling, as jobless claims rose to 247,000 last week, above expectations and the previous week’s revised figure. This increase, along with other reports indicating fewer private-sector job additions and more layoffs, suggests growing uncertainty tied to Trump’s tariff policies. The European Central Bank responded to global economic headwinds by cutting interest rates for the eighth time since last June. On the corporate front, Broadcom was set to headline earnings reports, with investors watching closely for insights into AI chip demand amid economic uncertainty, while Five Below and MongoDB stocks surged on strong quarterly results and positive forecasts.

Precious metals surged as Silver has surged past $35 per ounce, its highest in over 13 years, fueled by strong industrial demand and a persistent supply deficit. But Silver was eclipsed by Platinum, rising 5%, to its highest level since Russia invaded Ukraine in 2022 and 16% from multi-decade highs