The spectacular implosion of a powerful US political and business bromance has sent shockwaves through the markets. A bitter public feud between Tesla CEO Elon Musk and US President Donald Trump, escalating from policy disagreements to a full-blown war of words, triggered a significant market downturn. Tesla’s stock plunged 14.26% in a single day, while Trump’s media and technology conglomerate, DJT, fell 8%. The fallout even dragged down Dogecoin (DOGE), the meme coin king, by nearly 10% in a single day. CFTime has pieced together the key 48 hours that led to this dramatic split.
The drama began earlier this week when Musk criticized Trump’s latest “The One, Big, Beautiful Bill” (which includes hundreds of billions of dollars in tax cuts and increased defense spending, while also allowing the US government to increase borrowing).
Trump didn't remain silent, retaliating by withdrawing his nomination of Jared Isaacman for NASA. Isaacman, a long-time business associate of Musk and the person Musk hoped would lead US space exploration efforts, had his nomination unceremoniously pulled, shattering any illusions of a peaceful resolution.
Musk and Trump's Break: Trump Threatens Contract Cancellation
By Thursday, the feud had escalated into all-out public warfare. Musk accused Trump on X (formerly Twitter) of having ties to the Jeffrey Epstein sex trafficking case, claiming this was the real reason for the unreleased files, further inflaming the conflict. Prior to this, Trump had already expressed his "extreme disappointment" with Musk during a press briefing in the Oval Office and posted on Truth Social that ending government subsidies and contracts with Musk's companies was the easiest way to save billions of dollars in the budget.
Trump stated his "extreme disappointment" with Musk. Hours later, Musk countered on X, writing, "Trump couldn't have won the election without me." Trump's next response? "CRAZY." He then threatened to cancel federal contracts held by Musk's companies.
Musk responded on X, "Go ahead, make my day," and announced that SpaceX would begin shutting down its Dragon spacecraft program, the only US spacecraft currently transporting astronauts to and from the International Space Station.
Although Dogecoin wasn't directly involved in the dispute, its price plummeted following the breakdown of the relationship, falling nearly 10% in a single day, trading at $0.1717 at the time of writing. Musk's departure from Washington signals a waning of his influence, and Dogecoin holders are bearing the brunt of the fallout. In 2022, Dogecoin's price surged 15% in a single day after Tesla accepted DOGE for merchandise.
Following Trump's election victory last November, Dogecoin, along with other cryptocurrencies like Bitcoin, rallied as crypto traders anticipated a less regulated environment. That optimism has now evaporated.
Just a week ago, Musk attended a White House ceremony celebrating the official end of his tenure in the government efficiency department, where his team had cut billions of dollars in foreign aid and thousands of federal government positions.
In 2024, Musk donated nearly $300 million to Republican campaigns and actively helped Trump connect with Silicon Valley donors. White House officials stated that the government views Musk's recent actions as a clear shift in allegiance, emphasizing that the government no longer owes him any favors. This high-level political clash not only severely damaged Tesla's stock price but also cast a long shadow over the future of cooperation between Musk and Trump, and its effects will continue to ferment.
With Musk's withdrawal and increased government pressure, buyers are now paying the price for betting on their once-unbreakable bromance.
