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Investing.com-- The S&P 500 gave up gains on Thursday as investors weighed up a slump in Tesla (NASDAQ:TSLA) amid a Musk-Trump fallout and a positive U.S.-China call on trade.
At 1:07 p.m. ET, the Dow Jones Industrial Average fell 10 points, or 0.1%, while the S&P 500 lost 0.2%, the NASDAQ Composite climbed fell 0.2%.
Tesla slumps as Musk-Trump spat intesifies
Tesla fell more than 8% as the fallout from Trump and Musk intensified. Trump said he was "very disappointed" with Elon following the Tesla CEO’s criticism of Trump’s big, beautiful bill. In response, Musk hit back saying: "Without me, Trump would have lost’
The Musk-Trump political tied up had been highlighted as significant boon for the EV carmaker, but souring relationship has weighed on sentiment.
Trump, Xi have a positive call on trade
President Donald Trump and Chinese President Xi Jinping held a 90-minute phone call focused on trade, particularly addressing rare earth exports.
Both leaders agreed to resume trade negotiations, with U.S. officials Scott Bessent, Howard Lutnick, and Jamieson Greer set to meet their Chinese counterparts.
The call, described by Trump as "very good," led to mutual invitations for state visits.
The President also noted that the discussion was focused exclusively on trade. “Nothing was discussed concerning Russia/Ukraine, or Iran,” he wrote.
Jobless claims increased last week
Investors have been digesting a series of labor market data releases this week, as they look for evidence that Trump’s tariff agenda was beginning to have an impact on the U.S. economy.
The number of Americans filing for first-time unemployment benefits increased last week, data released earlier Thursday showed, with seasonally-adjusted U.S. jobless claims climbing to 247,000 in the week ended on May 31.
This represented an increase from the revised 239,000 in the prior week, and above the expected 236,000.
The four-week moving average, which aims to account for volatility in the weekly data, came in at 235,000, rising above the previous reading of 230,500.
This release has added to a series of reports released this week that point to a cooling labor market as companies grapple with uncertainty around Trump’s tariff policies.
An account from management services company ADP found that U.S. private employers added fewer jobs than anticipated in May, while job openings grew in April, although layoffs increased, potentially indicating some softening in demand for workers.
These numbers largely serve as a precursor to Friday’s all-important monthly nonfarm payrolls report, which is projected to show that the U.S. added 130,000 jobs last month.
Minneapolis Fed President Neel Kashkari said on Wednesday evening that the labor market was showing some signs of slowing down, and that the Fed needed to remain in wait-and-see mode amid heightened economic uncertainty.
Meanwhile, the European Central Bank slashed interest rates at its policy meeting earlier Thursday, lowering borrowing costs for the eighth time since last June as the euro area economy faces waning inflation but persistent uncertainty around the impact of global trade tensions.
Broadcom to headline earnings slate
The number of major companies still to report quarterly earnings is rapidly dwindling, but Broadcom (NASDAQ:AVGO) will headline Thursday’s slate of corporate results.
These numbers will be followed closely, with the semiconductor group potentially set to provide a fresh glimpse into the state of demand for cutting-edge artificial intelligence chips.
Some investors have flagged worries that businesses could be reining in spending on AI as they face up to a murky economic outlook, while others have raised questions over the necessity of the expenditures following the emergence of a low-cost model from China’s DeepSeek earlier this year. However, major tech companies have recently backed their plans to pour heavy investments into the nascent technology.
Elsewhere, Five Below (NASDAQ:FIVE) stock rose after the chain of specialty discount stores reported better-than-expected first-quarter results and issued a solid second-quarter guidance, helped by broad-based strength across most merchandising categories.
MongoDB (NASDAQ:MDB) stock surged after the database software company gave an upbeat annual forecast and reported quarterly results above estimates, while expanding its share repurchase plan.
Ambar Warrick and Peter Nurse contributed to this article