In a surprising turn of events, Elon Musk’s public apology to Donald Trump has created more positive momentum in global markets than the newly announced U.S.-China trade framework.
The Tesla CEO’s brief but pointed 15-word statement on Wednesday morning—acknowledging that some of his earlier posts criticizing Trump “went too far”—triggered a market rebound, particularly for Tesla shares. Investors see the olive branch as a strategic move to de-escalate tensions that had threatened the company’s future, especially with Washington policymakers.
Markets Respond to Musk’s Mea Culpa
Before U.S. markets opened, Tesla stock surged nearly 2.9%, following a 5.7% jump on Tuesday. The rally in Tesla shares outpaced broader market movements and overshadowed reactions to international policy news, including the latest developments in the China trade talks.
Musk’s apparent mending of ties with Trump—a key political figure with growing influence in Washington ahead of the 2026 midterms—has reassured investors concerned about potential state-level pushback against Tesla and its AI ventures.
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U.S.-China Trade Truce Fails to Impress Wall Street
Meanwhile, the much-anticipated “framework” for a renewed trade agreement between the U.S. and China fell flat on Wall Street. After two days of intense negotiations in London, both governments announced a preliminary deal, but details remain scarce.
U.S. Trade Secretary Howard Lutnick told the Wall Street Journal he was optimistic: “I feel really good about where we got to.” However, the agreement appears to be little more than a rehash of prior commitments rather than a significant breakthrough.
China has reportedly agreed to resume exports of rare-earth minerals and industrial magnets—critical for the global tech and defense industries. In return, Beijing is pressing for a relaxation of U.S. export controls on semiconductors and chip-making equipment. If successful, many analysts believe China could emerge with the upper hand.
Christopher Wood, global head of equity strategy at Jefferies in Hong Kong, commented that “this rare-earths issue has got real leverage for Beijing,” reinforcing the sense that the U.S. may be on the defensive.
Global Market Reactions Mixed
Across Asia, the response to Musk’s apology and the trade news was upbeat. The Nikkei 225, Shanghai Composite, and Hang Seng Index all climbed by more than 0.5%. European exchanges, however, remained cautious, with early afternoon trading mostly flat.
U.S. markets were slightly down in pre-market hours, with all three major indices off by about 0.15%.
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Long-Term Confidence Still Uncertain
While Musk’s diplomatic tone has offered short-term relief for Tesla shareholders, analysts caution against overconfidence. The market’s tepid reaction to the U.S.-China agreement signals continued skepticism.
“While the mood music has stayed positive, investors may be wary of the pattern that emerged during the previous U.S.-China trade talks in 2018–19,” wrote Deutsche Bank’s global head of macro research Jim Reid, referring to earlier cycles of enthusiasm that collapsed after talks stalled back home.
With geopolitical tensions, tech-sector regulations, and political relationships all in flux, Wall Street appears more responsive to CEO tweets than official trade frameworks—for now.
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