U.S. President Donald Trump has confirmed he has “no intention” of firing Federal Reserve Chair Jerome Powell, amid growing scrutiny of his administration’s handling of the economy. And indeed, Trump’s approval rating on economic issues has sunk to the lowest level of his presidency. This erosion is causing alarm among a growing number of investors and analysts.
In recent developments, Tesla CEO Elon Musk announced he would significantly reduce his involvement with Trump’s Department of Government Efficiency beginning in May. On the positive side, this decision has had a very reassuring impact on the stock market. The S&P 500 shot up 2.51%, the Dow Jones Industrial Average jumped 2.66% while the Nasdaq Composite roared up 2.71%. Investors were pleased with Musk’s declaration. Consequently, stock indexes rallied to record highs, including a huge Tesla stock rally as well.
The market continues to react positively to this news, the story on Tesla’s financial performance tells a very different tale. The company announced a 9% decrease in total revenue, down to $19.34 billion last quarter compared to $21.3 billion the same quarter last year. Tesla’s bottom line took a huge hit, net income down 71%, falling to only $409 million, or 12 cents per share. That’s a dramatic drop considering last year’s $1.39 billion, or 41 cents per share.
As Tesla shares were getting squeezed (they stood down 44% on the year as of Monday), Tesla was down 4% on Monday. This steep dive has meant massive profits for short sellers, who racked up $11.5 billion in mark-to-market profits in 2025 alone. Public sentiment against Musk and Tesla is especially dramatic since he’s made so many enemies in so many ways. Although nearly half of the respondents have a negative opinion of Musk, more than 47% of Americans disapproved Tesla.
In answer to these continuing economic difficulties, U.S. Treasury Under Secretary Scott Bessent refuses to be pessimistic. Hence, he thinks that we are going to see a China trade war de-escalation from Trump any day now. Second, the U.S. dollar index has been on a downward trend over the past months. Consequently, investors have no choice right now but to seek shelter under a broader, safer currency. In April, an exchange-traded fund pegged to this currency catapulted 8%. Accordingly, its overall cumulative increases for 2025 now total 11%.
It’s perhaps no surprise that Trump’s denial that he ever intended to replace Powell has raised eyebrows. He acknowledged the need for proactive measures from the Federal Reserve, stating that he “would like to see [Powell] be a little more active in terms of his idea to lower interest rates.”
“the immortal part” – Cassio in Shakespeare’s play Othello
As these events continue to play out, the increasingly complex relationship between political leaders, economic realities and corporate headship leaders continue to impact market perceptions. Investors are still waiting to see what happens next – with the White House’s economic policy direction, and with Tesla’s persistent financial woes.