Traders work on the floor at the New York Stock Exchange (NYSE), on the day of Circle Internet Group’s IPO, in New York City, U.S., June 5, 2025.
Brendan McDermid | Reuters
The S&P 500 fell on Thursday, spurred by a drop in shares of electric vehicle maker Tesla.
The broad market index dipped 0.53% and closed at 5,939.30, while the Nasdaq Composite pulled back 0.83% to end at 19,298.45. The Dow Jones Industrial Average dropped 108 points, or 0.25%, to settle at 42,319.74.
Tesla was a big laggard in the session, down more than 14% and losing its trillion-dollar market cap status. Shares slid after President Donald Trump said he was “very disappointed” in CEO Elon Musk. Musk shot back at the president, saying in a post on X that “without me, Trump would have lost the election.” The feud further intensified after Trump called Musk “CRAZY” and signaled that he might cut his companies’ government contracts.
Stocks were volatile during the session after Beijing said Thursday that Trump and China President Xi Jinping held a phone call, which was initiated by Trump, according to Beijing’s Ministry of Foreign Affairs and the Chinese embassy in the U.S.
Trump said in a post on Truth Social that it was a “very good phone call” with Xi, but it was still unclear what was accomplished from the communication between the two leaders. Trump said the two countries’ trade teams would be meeting again “shortly.”
The U.S. and China agreed to temporarily lower tariffs in May, propelling stocks to sharp gains for the month as investors hoped the worst of the trade policy turmoil was behind them. The S&P 500 rose more than 6% in May, scoring its best month since November 2023, along with the Nasdaq. Recently, however, escalating tensions between the U.S. and China have concerned investors.
“It’s positive they’re talking, but I think that the China deal will come well after other deals with India and Japan and other countries,” said Infrastructure Capital Advisors CEO Jay Hatfield. “The chances of just quickly coming to some resolution seems extremely low.”
All eyes on jobs
The labor market has been showing signs of softening lately, as jobless claims for last week came in at 247,000, an increase of 8,000 from the week before and more than the Dow Jones estimate of 236,000.
That comes one day after an estimate of private sector payrolls rose by just 37,000 in May, coming in sharply below the Dow Jones forecast for 110,000 and raising investors’ worries about a softening job market and the impact on the economy.
The string of labor market data this week raises the stakes for May’s nonfarm payrolls reading on Friday. Economists polled by Dow Jones are expecting the report to show a gain of 125,000 for the month, which would be 52,000 less than the previous month.
