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Good morning. Today we bring you the latest on the extraordinary public feud between Donald Trump and Elon Musk. We’re also covering:
Shares in stablecoin operator Circle surge
JPMorgan’s threat to new analysts
Global bond markets big read
And Taco trade game
The simmering feud between US President Donald Trump and his billionaire backer and the world’s richest man Elon Musk exploded into public view last night. Here’s what you need to know.
What happened: In a flurry of bitter comments in the Oval Office the US president called Musk “crazy” and said he was “very disappointed” with the Tesla chief executive for criticising his trademark finance bill that is at present going through the Senate. Trump suggested that Musk had “become hostile” after being turfed out of government and accused the billionaire of intervening in politics to serve his business interests.
How did Musk respond? Musk called for Trump to be impeached, suggested his trade tariffs would cause a US recession, threatened to decommission SpaceX capsules used to transport Nasa astronauts and insinuated that the president was associated with the late paedophile Jeffrey Epstein. Musk also talked of starting a new party and removing Republicans from office.
Why this matters: The stand-off between two of the world’s most powerful men had an immediate impact on financial markets. Tesla’s market value suffered its biggest one-day drop on record, after its shares fell more than 14 per cent following Trump’s remarks. The Tesla sell-off reverberated through US stock markets, with the S&P 500 and the tech-heavy Nasdaq Composite ending the session down 0.5 per cent and 0.8 per cent respectively. Shares in rivals to Musk’s space exploration group SpaceX and its satellite broadband network subsidiary Starlink rose. AST SpaceMobile gained 7.5 per cent while communications group EchoStar jumped 17.4 per cent.
The feud is also reverberating through Washington and the government. Last week, Trump pulled the nomination of billionaire astronaut Jared Isaacman, a close ally of Musk, to lead Nasa. Steve Davis, one of Musk’s lieutenants at SpaceX who led the so-called Department of Government Efficiency on a day-to-day basis, has also now left the administration, according to a government official. More senior figures close to the billionaire were set to abandon the initiative in the coming days, the official said.
Read more on the end of the Trump-Musk “bromance” here, and here’s what else we’re keeping tabs on today:
Economic news: The US government publishes May’s employment statistics. The number of new job openings is expected to have dropped sharply following the uncertainty caused by Trump’s on-off tariff policy.
UBS: The Swiss government will lay out its long-awaited reforms to the country’s bank capital rules. Here’s why they matter for UBS.
Italy: Voting begins on Sunday in Italy’s two-day referendum on reducing the time foreigners must live in the country before they can apply for citizenship. You can read more on the background to the vote here.
How well did you keep up with the news this week? Take our quiz.
Five more top stories
1. India’s central bank reduced its key interest rate by half a percentage point and cut the amount banks must hold in their reserves, hoping to boost lending and support the economy as concerns ease over inflation. The Reserve Bank of India’s rate cut was deeper than anticipated and lowered the benchmark repo rate to 5.5 per cent. Here’s more on the RBI’s dramatic decision.
2. Shares in Circle Internet, the stablecoin operator, climbed 168 per cent on their New York Stock Exchange debut yesterday in one of the largest US listings of the year. The US group raised $1.1bn and debuted at $31 a share before closing at $83.23, giving Circle a fully diluted market capitalisation of almost $22bn. The stock market listing raised hopes that the IPO market in New York is beginning to thaw.
More bitcoin news: The Trump family media company is seeking to launch a bitcoin exchange traded fund in its latest push to capitalise on surging enthusiasm for digital currencies.
And more IPO news: The owner of Pret A Manger has recently explored bringing in new investors to the sandwich and coffee chain ahead of a potential initial public offering.
3. JPMorgan Chase has told its incoming graduates that if they accept future-dated job offers elsewhere within 18 months of starting their analyst programme, they will be fired. The revised policy is the latest escalation of the Wall Street giant’s battle with private equity firms over junior talent.
4. Trump agreed with Xi Jinping to launch a new round of high-level trade talks between the US and China after the first conversation between the two leaders since the US president’s return to the White House. Trump said the Chinese president had invited him to China and that he had “reciprocated”. The high-level trade talks would begin soon, he added.
5. Builder.ai collapsed owing money to Big Tech, corporate spies, defamation lawyers and a “crisis communications” PR firm, the London tech group’s US bankruptcy filings have revealed. The latter three were hired after the Financial Times reported last year that the artificial intelligence start-up’s co-founders were embroiled in criminal investigations.
Today’s big read
Wobbly investor appetite has pushed up 30-year government borrowing costs in countries such as the UK, Japan and the US to or near their highest in decades and moved the question of debt sustainability up the political agenda. Recent sovereign bond auctions in Japan and the US received lukewarm responses, raising questions about how economies are managed and the sustainability of government spending plans — just as finance ministries are planning record levels of issuance.
We’re also reading . . .
Corporate winners and losers under Trump: This data story illustrates how global companies have fared since the US president’s inauguration.
🎧 The Wolf-Krugman Exchange: In part one of a new six-part series Martin Wolf and Paul Krugman discuss how trust in the postwar world economic system is being lost and weigh the costs and consequences of that.
European defence: The EU doesn’t need more spending to transform its military. It needs more co-operation across borders, writes Adam Tooze.
Israel: The far-right Netanyahu government is destroying the foundations of a Palestinian state and must be held to account, writes the FT’s editorial board.
Chart of the day
Test your knowledge of how Trump’s trade war has affected import duties. These charts are all incomplete — they form an interactive test of the Trump Taco theory. How accurately can you fill them in?
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Take a break from the news
Here are six new films for you to enjoy this weekend, including a documentary about the Columbia University protests, a new satire from the creator of Succession and the return to our screens of Gillian Anderson.
