Trump-Musk induced Tesla slide points to market risks from massive stocks

Written by Louis Crawbaf

New York (Reuters) -The families of the rift between president Donald Trump and President Tesla Illon Musk, the world as a political drama, but also became a scene in Wall Street, highlighting the risks of stock markets from the largest shares of the world.

Tesla fell 14 % on Thursday, as Musk and Trump dramatically stumbled on social media, including the president who threatens to cut government contracts to Musk companies.

Although the shares recovered modestly on Friday, the decline on Thursday has led to the decrease in some of the continuous stock indexes, which are greatly affected by companies that have the largest market values.

Tesla falling about half of the declines on Thursday for both S&P 500 and NASDAQ 100, which decreased by 0.5 % and 0.8 %, respectively, per day.

The S& P 500 is generally the standard for the stock market in the United States, while the NASDAQ 100 is the basis for Investco QQ SQ TRUST, one of the most popular boxes on the stock exchange.

“It has been held widely held,” said Robert Paville, chief portfolio manager in Dakota Wellth. “When this company with large names that represent a large part of the indicator is sold, it has a total impact on the indicator, but also has a psychological impact on investors.”

Tesla decline indicates the risk that many investors have warned for a long time, from indexes that are severely affected by a handful of huge stocks. Tesla is the smallest according to the market value of a group of huge technology and growth companies known as “Seven Magnificent”, which has pushed the total stock index gains in 2023 and 2024. The group has obtained 2025 so far, but recently it was back.

It was a wonderful seven, which includes Apple, Microsoft and NVIDIA, a joint weight of about a third of the S&P 500 in general from the closure of Thursday.

“If you are an investor and possess S&P or Nasdaq 100 … you only need to be aware that you have a lot of exposure to a very small group of names,” said Todd Sohn and ETF and the technical strategies in the strategy.

Tesla decreased on Thursday led to about $ 150 billion in its market value, while its weights in the S&P 500 and NASDAQ 100 1.6 % and 2.6 %, respectively.

Tesla shares were shouted to some extent, an increase of about 5 % in the mid -day trade, which put its market value about 970 billion dollars. Microsoft and NVIDIA, whose values ​​in the market exceeded $ 3 trillion, have witnessed 6.9 % weights and 6.8 % in S&P 500 as of Thursday.

Tesla shares have decreased about 37 % since mid -December, a period that has witnessed a decrease of S&P 500 about 1 %, which means that its effect on the index has also decreased during that time.

Arrows have a widespread impact among the traded investment funds. Tesla has a varying presence in about 10 % of the total universe of about 4,200 health, according to Sohn.

This includes the box SPDR Sector Sector Sector, which was drowned by 2.5 % on Thursday, and Seven Roundhill Magnificoft Seven Etf, which decreased by 2.6 %.

Sohn said: “It is very important to know what is in all the traded investment funds, because many of them interfere.”

(Participated in the reports of Luis Krauskov; edited by Alden Bentley and Dian Kraft)