US stocks slipped on Tuesday, pulling back after a strong second-quarter finish that saw the S&P 500 notch another record high.
The S&P 500 fell 0.3%, the Nasdaq Composite declined 0.4%, and the Dow Jones Industrial Average edged down by 33 points, or 0.1%.
Tesla shares dropped 7% after President Donald Trump posted on Truth Social, suggesting that the Department of Government Efficiency (DOGE) should investigate government subsidies received by Elon Musk’s companies.
The remarks came days after Musk criticized Trump’s wide-ranging spending legislation, referred to by the president as a “big, beautiful bill” calling it “utterly insane and destructive.”
Responding to Trump’s post, Musk wrote on X: “I am literally saying CUT IT ALL. Now.”
The billionaire also suggested that a new political party would be formed if the bill is passed.
If this insane spending bill passes, the America Party will be formed the next day.
Our country needs an alternative to the Democrat-Republican uniparty so that the people actually have a VOICE.
The latest exchange continues a series of public clashes between the two over government spending, which began earlier this year.
Markets are also watching for developments on trade policy, with Trump’s 90-day reprieve on his steepest tariffs set to expire next week.
Investors are hoping for progress in negotiations with key trading partners.
Separately, Federal Reserve Chair Jerome Powell is set to speak at the European Central Bank’s Forum on Central Banking in Portugal.
Powell indicated last week that the Fed will likely keep rates steady until there is greater clarity on how tariffs are affecting inflation.
Tuesday’s decline follows a notable recovery in the second quarter, when stocks bounced back from steep losses in April triggered by Trump’s tariff rollout, which had pushed the S&P 500 close to bear market territory.
A solid end to June
All three major US stock indexes closed higher on Monday, rounding out a strong second-quarter rebound.
The S&P 500 gained 0.52% to end the session at a record high of 6,204.95, while the Dow Jones Industrial Average rose by 275.50 points, or 0.63%.
The Nasdaq Composite added 0.47%.
Markets began the quarter under pressure, with sharp declines in early April following President Donald Trump’s announcement of new tariffs.
However, each index recovered over the course of the quarter, finishing solidly in positive territory.
The S&P 500 advanced more than 10% during the three-month period, the Nasdaq jumped 18%, and the Dow posted a gain of nearly 5%.
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