In a scene more sitcom than statesmanship, President Donald Trump and Tesla CEO Elon Musk launched a Twitter (ahem, X) throwdown this week that sent shockwaves through markets. What started as a spat over Trump’s “One Big Beautiful Bill” has investors snacking popcorn rather than shares while watching a Trump vs Musk brawl: Tesla stock plunged, crypto got pummelled, and even meme coins weren’t safe. The feud unfolded live on social media – complete with insults, policy jabs, and even an Epstein reference, and it quickly bled into market prices. The result? A classic “keyboard-war” meltdown that rattled investor psychology, proving that sometimes a tweet war can matter as much as any CEO earnings call.
Tesla Takes a Tumble
Tesla (TSLA) bore the brunt of the fallout. On Thursday, Tesla shares collapsed roughly 14%, wiping out about $150 billion of market value as Trump and Musk traded barbs. Analysts say it was the biggest one-day percentage drop in Tesla’s history – a reality-TV drop more than a fundamentals one. By the end of the week, Musk’s net worth had dipped by some $34 billion on Bloomberg’s billionaire index. [foxbusiness.com] (though it bounced back a bit on Friday).
Why the rout? The two had been allies: Musk even chaired Trump’s mock “Department of Government Efficiency” (DOGE), and Tesla had enjoyed generous tax credits under Trump. But Musk went full Grinch on Trump’s new spending bill, calling the GOP’s $4 trillion proposal a “Big Ugly Spending Bill” and a “disgusting abomination. He argued on X that the bill “was never shown to me even once and was passed in the dead of night so fast that almost no one in Congress could even read it!. Trump, furious, publicly dropped the hammer on Musk: hinting he’d killed Musk’s EV mandates and threatening to terminate Elon’s government subsidies and contracts in the name of budget cuts.
In markets, this feud became a real-time risk-on/risk-off switch. The Nasdaq 100 and S&P 500 both slid on the news – Tesla alone accounted for roughly half of Thursday’s drop on those indexes. One strategist quipped that when a “big-name company” like Tesla catches a cold, it gives the whole market the sniffles [reuters.com]. In other words, every Musk tweet was suddenly a market-moving headline.
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Tesla stock loss: Down ~14% (≈$150B wiped out) on Trump-Musk feud
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Indexes hit: Thursday’s slide pushed the S&P 500 down ~0.5% and Nasdaq ~0.8%.
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Investor fear: “When this big-name company… sells off, it… has a psychological effect on investors,” notes a portfolio manager.
Through this chaos, one theme emerged: investors were basically pricing in “corruption risk”. As one Tesla analyst grumbled, until now the stock had “risen purely because of expectations of corruption” under Trump, not company performance. In the blink of an eye, the market decided it wanted its party favours back and punished Tesla accordingly.
Crypto Rollercoaster: Bitcoin and Dogecoin Dip
It wasn’t just stocks feeling the heat. Crypto markets buckled too, as Trump and Musk’s rhetoric fuelled a risk-off rush in digital assets. Bitcoin briefly dipped below $101,000 – off about 3% – after the feud went public. Ether, XRP, Solana and others also stumbled (e.g. ETH fell ~7%, XRP ~5%). In fact, nearly $1 billion in crypto long positions were liquidated in a matter of hours, as leveraged traders got caught off-guard by the sudden sell-off.
Dogecoin (DOGE) took one of the hardest hits. Known as “Elon’s favourite crypto,” Doge fell roughly 12-13% in 24 hours, its biggest one-day drop in months. The CoinDesk Markets team notes Dogecoin plunged from ~$0.19 to about $0.16 amid heavy selling volume [coindesk.com]. One obvious culprit was Musk’s exit from the symbolic “DOGE” Department of Government Efficiency: without Dogecoin’s quasi-official status, the meme coin lost a key hype catalyst. Traders also fretted that the Trump vs Musk public clash (and global trade fears) sapped risk appetite for speculative assets. As a CoinDesk summary put it, “Dogecoin’s latest plunge comes against a backdrop of risk-off sentiment” and Musk “once known as a Dogecoin backer” suddenly seemed MIA [coindesk.com].
Nearby, even a wannabe $TRUMP coin was in the crossfire: a rumoured $520-million cache of Trump-branded tokens is set to unlock soon, potentially flooding the meme-coin market (only adding to investor jitters). In short, meme currency speculators had front-row seats to the drama, and many chose to bail.
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Bitcoin drop: Fell ~3% below $101K during the spat.
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Dogecoin tumble: Plummeted ~12-13%, from $0.19 to $0.16 in a day.
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Crypto liquidations: Roughly $988M wiped out, 90% from long positions.
Politically-tinged crypto swings aren’t new – who can forget tweets about Tesla accepting Doge – but this time it was a pure risk-off move. One analyst observed that now even cryptos can become pawns in a billionaire pissing match, reflecting how extreme social-media rumours have become trading signals.
Investor Psychology & Political Theatre
Why did markets get so spooked by a Trump vs Musk Twitter feud? Part of it is sheer psychology. When two megawatt personalities start tossing nukes on social media, traders recall past Musk “pump-and-dump” fireworks (like the GameStop saga or meme coin rallies) and panic. Many retail investors have seen how a single tweet can “cost them money if they don’t act fast,” as one hedge-fund manager put it. The Musk-Trump fight also hit nerves about policy uncertainty: Trump hinted at cutting EV credits and slapping big tariffs, while Musk rattled sabres on SpaceX projects and government contracts.
Politically, the spat turned markets into a reality show. Republican loyalists and tech bulls suddenly saw their cowboys at odds. Some onlookers joked this was Trump learning that even a self-styled “true patriot” Musk has a huge ego, and Musk realizing that politics isn’t as forgiving as loyalty to the man who once made him “DOGE czar. In any case, the drama amplified normal market anxiety. A classic example: many traders ignore niche tokens or legislative bills, until a tweet suggests they might matter.
Trump vs Musk, So Now What?
By Friday some dust settled: Tesla clawed back a bit of ground (shares rebounded ~5% on Friday) and Musk’s net worth bounced. Bitcoin and Doge found support around recent lows. But the episode left lasting impressions. For one, investors are reminded that nobody is too big to tweet embarrassingly and spook the street. It also shows how political theatre can become market risk – money flows can reverse on a dollar sign joke or an unrelated policy fight.
For personal finance buffs like us, it’s a cautionary tale: Portfolio risk isn’t just economic. It can come from headline news or the next random tweet battle between tycoons. The fundamentals of Tesla or cryptos didn’t suddenly change – but investor sentiment did, and that’s enough to swing prices. As one market observer put it: “Where there is friction, there can also be volatility.” [reuters.com]. So strap in: when influencers tweet, markets may quiver.
What do you think? Will the Trump vs Musk beef be resolved or will it keep making headlines (and portfolio ripples)? Let us know in the comments below. And if your portfolio’s feeling frothy, maybe pour yourself some popcorn instead – this market drama isn’t over yet.