The influence of Trump on the stock market is diminishing, with Elon Musk being the first casualty. On Tuesday, February 25, Tesla’s market cap dropped below the $1 trillion threshold, following an 8% decline throughout the day. The main issue stems from Chinese consumers, who appear to be unimpressed by Tesla’s latest semi-automated driving system that has not met Musk’s expectations.
Since peaking in December at $488, Tesla’s stock has decreased by 38%. The current valuation is now only 20% higher than the price on the day Donald Trump was elected. This downturn was anticipated: the stock price had increased because of Musk’s close relationship with Trump, as traders expected quick regulatory approvals for Tesla’s self-driving vehicles.
At this time, however, that’s not happening, and Tesla’s sales are declining, affected by a drop in demand for electric vehicles and Musk’s controversial behavior, which is harming his brand. While he still holds the title of the world’s richest person with a worth of $380 billion, his wealth has decreased by about $100 billion.
See more: Macron Believes Trump could Restart a Constructive Dialogue with Putin.
Overall, the “Trump bump,” or the post-election surge in the stock market, has definitely come to an end. The tech-heavy Nasdaq has fallen 6% from its high on December 16, and the S&P 500, which includes America’s largest corporations, has decreased by 3.2% since reaching its peak on February 19.
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