Eliza Wong
Financial markets recoiled as Tesla shares plunged over 7% during July 7 trading, dragging down major tech stocks amid escalating tensions between Elon Musk (埃隆·马斯克) and former President Donald Trump (唐纳德·特朗普). The Tesla CEO ignited political fireworks by announcing the formation of the “American Party,” drawing scathing criticism from Trump who called the move “absurd.” Musk responded with a literary counterpunch, quoting Frank Herbert’s (弗兰克·赫伯特) iconic Dune line: “Fear is the mind-killer. Fear is the little-death that brings total obliteration” on social media platform X.
Key developments:
– Tesla stock nosedived 8% intraday amid broad tech sector weakness
– Trump declared Musk had gone “completely off the rails” since mid-June
– Treasury Secretary Scott Bassett (斯科特·贝森特) advised Musk to “focus on business”
– SpaceX faces halted Air Force project over environmental concerns
– Musk announced new third party targeting 2026 congressional elections
Market Tremors: Tech Stocks and Tesla’s Steep Decline
July 7 trading opened with tech stocks leading a broad market retreat, intensifying the ongoing Tesla stock plunge. The Nasdaq fell 0.68% while the Dow Jones Industrial Average dropped 1.77%, creating headwinds for electric vehicle stocks across the board. Tesla led the decline among the “Magnificent Seven” tech giants, sliding below the critical $300 support level to settle near $293 per share. Market analysts immediately cited the escalating political friction surrounding Musk as a primary accelerator of the Tesla stock plunge.
Broader Tech Sector Weakness
Several compounding factors worsened the Tesla stock plunge:
– Rising bond yields pressuring growth stock valuations
– Profit-taking after Q2 delivery numbers missed expectations
– Uncertainty surrounding Musk’s political entanglement
With Tesla’s beta hovering near 2.0, the volatility surrounding these developments was magnified in the stock’s performance. This significant Tesla stock plunge represents the largest single-day drop since April’s disappointing earnings report.
The Political Firestorm: Trump vs. Musk
Tensions reached a boiling point when Trump publicly dismissed Musk’s political ambitions during a July 6 press appearance. “He could have fun with it,” Trump remarked about the American Party announcement before adding: “But actually it seems pretty absurd.” The criticism escalated hours later via Trump’s Truth Social platform where he expressed disappointment in Musk having “gone completely off the rails these past five weeks.”
The “Dune” Defense
Musk responded within hours using his favorite weapon—social media. Quoting from Frank Herbert’s (弗兰克·赫伯特) 1965 science fiction masterpiece, he deployed: “Fear is the mind-killer. Fear is the little-death that brings total obliteration” directly beneath Trump’s critical post. Literary analysts note this specific passage depicts how the Bene Gesserit sisterhood overcomes terror through mental discipline—a coded critique of Trump’s approach to his announcement. Musk previously referenced Dune when defending Twitter acquisition risks in 2022.
American Party: Musk’s Political Gambit
Musk formally announced the “American Party” on July 5, positioning it as representing the “80% of centrist voters” frustrated with partisan polarization. The platform combines Musk’s signature issues:
– Technology-driven governance reforms
– Deficit reduction through AI efficiency
– Space exploration acceleration
– Rollback of the “Big and Beautiful” tax provisions
The announcement came after weeks of public clashes with Treasury Secretary Scott Bassett (斯科特·贝森特) over implementation of the recently enacted “Big and Beautiful” legislative package increasing corporate tax rates for companies earning over $2 billion annually. The Tesla stock plunge accelerated after reports surfaced that SpaceX Board members opposed Musk’s political venture.
Midterm Strategy
Party formation documents reveal an initial focus on 2026 midterm elections, targeting congressional seats across ten states through:
– Grass-roots fundraising mechanism via Musk’s X platform
– Recruiting disillusioned centrist politicians for key races
– Aggressive digital campaign infrastructure development
Political historians note serious challenges—third parties rarely capture congressional seats with only four in U.S. history gaining more than one seat per election cycle. This Tesla stock plunge indicates investor skepticism regarding Musk’s capacity to manage political ventures alongside automotive and space enterprises.
War of Words with Washington
Treasury Secretary Scott Bassett (斯科特·贝森特) escalated tensions on July 6 by publicly questioning Musk’s political foray during a CNN interview. “Tesla and SpaceX directors don’t particularly like this action,” Bassett stated. “They’ll want him focused on business rather than politics.” The Treasury chief then delivered a personal jab: “Look at poll data—Elon just isn’t that popular these days.”
Math Skills Battle
Musk counterpunched within hours: “He majored in political science, doesn’t even understand common mathematics,” igniting social media debate comparing government debt theories. Treasury Department data shows federal debt-to-GDP ratio has risen from 106% to 122% since 2021, while Musk contends his government efficiency initiatives during 2023–2024 saved taxpayers $234 billion:
– Automation of 19 agency functions
– Elimination of duplicative programs
– Rescissions reducing budget deficits
Their conflict turned physical when arguments over FedNow implementation during Musk’s government efficiency role required Secret Service intervention in March 2024. This personal history heightened investor anxieties manifesting in the recent Tesla stock plunge.
SpaceX Fallout: Military Project Suspension
Simultaneous with Tesla’s market troubles, the U.S. Air Force halted SpaceX cargo rocket testing at Johnston Atoll—a key component of the Tactically Responsive Space Access initiative. Environmental assessments suspended the project amid concerns about:
– Rocket exhaust impact on fragile coral ecosystems
– Potential plutonium contamination from historical nuclear tests
– Cumulative environmental impact exceeding limits
This setback directly impacts SpaceX’s $193 million Air Force contract for rapid payload deployment capabilities. The atoll previously hosted missile testing that caused plutonium pollution, ranking among EPA’s highest-concern contamination zones.
Environmental Opposition
The conservation group Ocean Defiance challenged the project: “Johnston Atoll has already suffered nuclear testing and chemical weapons disposal. Rocket landings would create irreparable harm.” Military timelines projected John Glenn-class rockets landing up to ten times annually from 2027 onwards.
Ripple Effects and Looking Ahead
The Tesla stock plunge and political firestorms reveal fissures in Musk’s industrial empire as he pivots to politics. Industry analysts see three immediate consequences:
1. Leadership focus fragmentation between four major companies
2. Investor concerns over CEO priorities amid sinking TSLA valuation
3. Government contract vulnerabilities affecting SpaceX and Tesla
Wall Street downgrades began within hours of the Tesla stock plunge, with Bernstein analysts noting: “We must reassess execution risk given Musk’s intense political involvement.” Technical analysis shows critical support at $275 must hold to prevent further TSLA declines.
The Convergence Point
Midterm outcomes could prove decisive—a failure to secure congressional representation would likely refocus Musk on core businesses. Trump allies confirm plans to actively dismantle the American Party campaign through Republican infrastructure, ensuring fierce electoral battles. For investors, the revitalizing Tesla’s position requires stability:
– De-escalation of political conflicts
– Tangible progress on Cybertruck deliveries
– Resolution with regulatory agencies
Observe key dates approaching including Q2 earnings (July 23), Federal Reserve decisions on “Big and Beautiful” implementation (August), and party ballot access deadlines. Tesla’s recovery trajectory will showcase business innovation’s resilience against political crosswinds.
