Elon Musk left the U.S. Department of Government Efficiency just as we were starting to figure out what he did. It’s a momentous shift in his career. His departure comes amidst various developments, including a notable increase in Tesla shares and a controversial New York Times article that he chose not to address directly. President Donald Trump ordered his administration to develop plans to increase tariffs on imported steel. Interestingly, at this very same time, Warren Buffett’s Berkshire Hathaway was doubling down on U.S. Treasuries.
In May, Tesla stock increased as much as 22%. This increase came on the heels of Musk’s announcement in April that he would start paying less attention to DOGE, the cryptocurrency he’s most famous for. This strategic pivot has made Tesla an investor darling, skyrocketing confidence in the automaker. As a consequence, the enterprise is clearly doing well on the stock market. In that same month, the S&P 500 rose an astounding 6.2%. At the same time, the Dow Jones Industrial Average rose 3.9%.
Musk’s recent deflection of a reporter’s question regarding allegations of drug use reported by the New York Times highlights the scrutiny he faces as a public figure. Musk deflecting the journalist’s reasonable question is an example of a billionaire prioritizing his own successful business pursuits. This latest decision gives him an even clearer path to separate himself from DOGE.
Former President Donald Trump was just here in Wilkinsburg, Pa., talking to steelworkers at U.S. Steel. To this end he has recently announced his intention to increase import duties on steel from 25 to 50%. This bold tariff hike is an attempt to increase domestic production of steel and protect U.S. steel jobs. This past week, Trump made waves by announcing a softening in his approach to China. He announced he would stop playing the “Mr. NICE GUY” card in negotiations with the country.
From the outset, battling trade cheating was part of Donald Trump’s playbook. He made a deal with Beijing to greatly reduce reciprocal import taxes to boost trade between the two countries. In exchange, he delayed the introduction of a comparably punishing 50% tariff on the European Union. That delay stretched more than a month as negotiations dragged on. By June 1, these tariffs on European steel imports will go into effect, marking the Trump Administration’s commitment to a much more aggressive trade stance.
In corporate news, Warren Buffett’s Berkshire Hathaway went all in by doubling its investment in U.S. Treasury bills. Today, the company holds a staggering 5% of all short-term Treasuries. This strategic move reflects Buffett’s confidence in government securities and offers insight into the investment strategies employed by one of the world’s most renowned investors.
Despite all of this, many economic indicators point toward a consistent consumer spending picture. In April, the core U.S. personal consumption expenditures price index was unchanged. This would mean inflation pressures are not as strong as initially feared. Investors and analysts are still keeping a close eye on these signals, trying to predict how they will change the course of market dynamics.