TL;DR

Tesla plunges on Musk-Trump feud; Lululemon slumps on weak guidance; Broadcom beats, guides strong on AI.

Highlights

• Tesla shares fell 14–17%, erasing over $100B in value, after a public feud between Elon Musk and President Trump over a bill to end EV subsidies and threats to terminate major federal contracts16.
• Trump escalated pressure on Musk, threatening to cancel SpaceX, Starlink, and Tesla contracts; Steve Bannon called for Musk’s deportation and federal seizure of SpaceX13.
• Lululemon shares dropped 21% after Q2 and full-year guidance missed expectations; Americas sales declined, and inventories remain high4.
• Broadcom beat Q2 estimates, with 46% YoY growth in AI networking; Q3 guidance and AI chip sales outlook topped forecasts3.
• Russia launched a large-scale missile and drone attack on Ukraine; Ukrainian drones struck Russia’s Bryansk airport, targeting air defense and fuel depots214.
• Iran reportedly ordered enough Chinese missile material for 800 ballistic missiles, raising regional security concerns7.
• US Treasury’s FX report found no currency manipulation but added Ireland and Switzerland to its monitoring list; China remains under scrutiny5.
• German Chancellor Merz warned US tariffs threaten German automakers and urged Trump to avoid escalating a trade war9.
• Musk warned Trump’s tariffs could trigger a US recession in H2 202512.
• US sanctioned four ICC judges over warrants for Israeli and US officials, drawing criticism from the ICC and European allies10.
• Circle (USDC issuer) debuted on the NYSE, highlighting stablecoin adoption in public markets11.
• Scientists identified a new coronavirus strain in China (HKU5-CoV-2) related to MERS, warning of potential pandemic risk8.

Commentary

US equities saw sharp moves in several high-profile names after the close, led by Tesla ’s 14–17% selloff. The drop followed an escalating public dispute between Elon Musk and President Trump regarding a bill that would end EV subsidies and potentially cut billions in federal contracts with Musk’s companies16. The threat of contract terminations and political scrutiny added to the pressure, with Steve Bannon calling for Musk’s deportation and seizure of SpaceX13. This introduces significant headline and regulatory risk for Tesla , SpaceX, and related government-exposed tech names.

Consumer discretionary was also in focus after Lululemon ’s 21% after-hours plunge. Despite a Q1 beat, weak Americas sales, elevated inventories, and lowered guidance for Q2 and the full year point to ongoing demand and margin headwinds in US retail4. In contrast, Broadcom’s results and guidance reinforced the market’s preference for AI infrastructure plays, with robust growth in AI networking and semiconductors3.

Geopolitical risks remain elevated. Russia’s major aerial assault on Ukraine and reciprocal Ukrainian drone strikes on Russian infrastructure could impact energy and defense markets214. Iran’s procurement of Chinese missile materials adds to Middle East security concerns7. These developments may support defense equities and keep a bid under energy prices, while safe-haven flows could benefit Treasuries if tensions escalate.

On the macro front, the US Treasury’s FX report avoided labeling any country a manipulator but added Ireland and Switzerland to its watchlist5. German Chancellor Merz’s warning on US tariffs and Musk’s recession call highlight growing concerns over trade policy and global growth, with potential implications for automakers, the euro, and risk sentiment912.

Elsewhere, Circle’s NYSE debut underscores continued institutionalization of crypto, while the emergence of a new coronavirus strain in China is a reminder for traders to monitor public health headlines for potential market impact118.