Tesla Jumps 5.5% as Musk Refocuses on Core Companies

Tesla shares rose 5.5% in after-hours trading following Elon Musk's announcement that he will scale back involvement with DOGE to prioritize Tesla, X, and SpaceX. US stocks broadly rallied, with all major indexes gaining over 2.5% as markets responded positively to President Trump’s reversal on Fed criticism and hints at lower tariffs on Chinese goods. Investors also returned to the dollar after recent declines, with speculation that Treasury Secretary Bessent played a key role in steering policy stability behind the scenes.

Equities

The FTSE 100 rose 0.6% on Tuesday, building on its recent winning streak and reaching its highest level since early April. Gains were led by consumer staples, which climbed 1.2%, helped by strength in supermarket stocks.

J Sainsbury rose 2.3% after J.P. Morgan raised its target price, while Tesco added 1.5%. Financials were also stronger, up 1.2%, and mining stocks gained 0.9% as copper prices in London reached a two-week high. Homebuilders continued their positive run with a fifth consecutive session of gains, climbing 1%.

DCC fell 3.6% after announcing the sale of its healthcare division to private equity firm Investindustrial Advisors. The IMF cut the UK’s 2025 growth forecast from 1.6% to 1.1%, citing risks linked to US tariffs.

US stock indices rallied sharply, driven by earnings reports and renewed hopes for progress in trade talks with China. The Dow Jones jumped 2.66%, the S&P 500 rose 2.51%, and the Nasdaq climbed 2.71%. After hours, futures extended those gains following remarks from President Trump, who said he had no intention of firing Federal Reserve Chair Jerome Powell and indicated a softer stance on China tariffs. S&P 500 futures gained almost 2% after the close.

Among the best-known US companies, Tesla shares surged 5.5% in extended trading after Elon Musk said he would reduce his involvement in Dogecoin-related activities to refocus on his core businesses, including Tesla, X, and SpaceX. Apple rose 2% in after-hours trading, while Amazon and Nvidia each gained 3%.

Earlier in the day, industrial conglomerate 3M saw its shares jump after releasing better-than-expected quarterly results. In contrast, defence contractors Northrop Grumman and RTX fell sharply, with investors reacting negatively to their earnings.

The IMF downgraded its 2025 growth forecast for the US to 1.8%, citing the impact of prolonged high tariffs. Investors are watching closely for any signs of formal progress in trade negotiations with China, although Treasury Secretary Scott Bessent warned talks could be slow.

Forex & Commodities

The US dollar steadied on Wednesday morning following a sharp early rise, after President Trump stepped back from recent attacks on Federal Reserve Chair Jerome Powell. The dollar had climbed over 1% against the yen to reach 143.21 in Asian hours before settling to 141.85. It rose 0.4% to 0.8222 against the Swiss franc, having jumped more than 1% earlier. The euro slipped 0.2% to $1.1393, while the pound was down 0.15% at $1.3313. Trump's comments easing rhetoric on both the Fed and China trade policy helped lift sentiment, while Treasury Secretary Scott Bessent reinforced expectations of a gradual de-escalation in trade tensions.

Gold continued its strong run, reaching a record high of $3,500 per ounce on Tuesday. JP Morgan now forecasts the metal could top $4,000/oz by the second quarter of 2026, citing resilient central bank demand and concerns about slowing growth from US tariffs. The bank expects an average price of $3,675/oz by late 2025. Goldman Sachs also raised its outlook, now targeting $3,700/oz by the end of next year, with a potential peak near $4,500/oz under more extreme scenarios. JP Morgan sees central bank demand as the most important factor in sustaining gold’s rally, while noting that unexpected US economic resilience could pose a risk if it delays rate cuts.

Oil prices rose more than 1% on Wednesday. Brent crude climbed $1 to $68.44 a barrel, and WTI rose 99 cents to $64.66. Prices were supported by new US sanctions on Iranian crude and LPG exports, and by a larger-than-expected fall in American oil inventories. The American Petroleum Institute reported a 4.6 million barrel draw last week, well above the 800,000 barrel decline expected by analysts ahead of official US data due later today.