The US economy continues to deliver mixed signals. Friday’s jobs report brought some reassurance: nonfarm payrolls increased by 139,000 in May, while unemployment held steady at 4.2%, the Financial Times reports.
Despite earlier downward revisions to March and April figures, markets responded positively, with the S&P 500 climbing 1% as expectations solidified that the Federal Reserve will maintain interest rates in the near term — even amid mounting pressure from President Trump for cuts.
Yet in the corporate arena, one of America’s highest-profile companies finds itself at a crossroads.
Tesla’s stock surged nearly 45% following CEO Elon Musk’s April announcement that he would step back from his political engagements and refocus on business. But that rally came to a halt last Thursday, when Musk’s very public split with President Donald Trump rattled investors. Tesla shares fell 14% in a single session and remain essentially flat compared to their 2022 levels.
The downturn may reflect more than just political optics. Sales of Tesla vehicles have slowed both domestically and abroad. Analysts cite growing competition — particularly from more affordable Chinese EV makers — and waning enthusiasm for Musk’s brand among some US consumers. Consensus estimates now predict sharper declines in Tesla vehicle deliveries through late 2025 and 2026.
Tesla’s gross margins have also been narrowing as production volumes slip. Its battery segment has faced disruption from newly imposed tariffs, and its once-hyped robotaxi initiative appears to be trailing rivals such as Waymo.
Multiple factors appear to be driving investor concerns:
Policy Risk: A bearish report from JPMorgan suggested that provisions in Trump’s recently proposed “big beautiful bill” could reduce Tesla’s operating earnings by up to 50%. The estimated $3.2 billion impact stems from potential cuts to EV tax credits and carbon credit programs — both historically beneficial to Tesla. Now that Trump and Musk are publicly at odds, analysts doubt the Tesla CEO can leverage political influence to alter the bill.
Cross-Company Perception: Some of Musk’s other ventures, such as X and SpaceX, have seemingly benefited from favorable federal treatment. Investors may have priced in similar assumptions for Tesla — optimism now undercut by the high-profile fallout.
Partisan Demand Shifts: Data from TD Cowen suggests a notable shift in Tesla’s US sales dynamics. Since Musk aligned with Trump in 2024, sales in conservative-leaning regions rose, while those in liberal-leaning areas declined. With that alliance now fractured, some analysts fear a broader cooling of demand across the political spectrum.
Still, not all outlooks are bearish. Wolfe Research analyst Emmanuel Rosner argues that Tesla could mitigate some challenges through product diversification and its current tariff advantages. He points to the company’s efforts to launch more affordable models and notes that with looser emissions targets, legacy automakers may reduce EV offerings — potentially easing competition in key markets.
With no clear resolution between Musk and Trump, Tesla’s trajectory remains uncertain, both politically and financially.
While US tech and manufacturing sectors face turbulence from shifting trade policy, the American IPO market continues to attract global interest — a testament to the enduring appeal of US capital markets.
Despite growing skepticism about “American exceptionalism” in broader economic debates, foreign firms are increasingly turning to US exchanges for their public debuts. Recently, Brazilian meat processor JBS and UK-based fintech Wise have taken steps to shift their primary listings to the US, following a trend also embraced by South Korea’s Viva Republica and Chinese EV firm Windrose.
Though international companies have historically accounted for a small portion of total IPO deal value in the US, they now represent more than 40% of listings by number since 2023. So far in 2025, 60 non-US firms have launched IPOs stateside — 43% of all listings this year.
Several factors continue to make US listings attractive:
Valuations: The S&P 500 trades at a premium compared to Europe’s Stoxx 600 — with a P/E ratio of 26 versus 17 — reflecting investor optimism about US growth potential.
Liquidity and Visibility: US markets offer deeper capital pools, greater passive investment flows, and unmatched visibility.
Executive Incentives: US listings often come with fewer constraints on executive compensation, adding appeal for company leadership.
According to Janus Henderson’s Julian McManus, US markets command a valuation premium not despite volatility but because of the long-term growth expectations that outweigh short-term instability.
Still, the IPO surge comes with caveats. Domestic firms are delaying public listings, citing regulatory burdens and heightened market uncertainty. Recent candidates like Klarna and StubHub have paused IPO plans, partially due to fallout from Trump’s tariff regime.
Even so, the influx of foreign IPOs underlines the fact that — for now — the US remains the default destination for global capital. While talk of the decline of American financial dominance circulates, the evidence from equity markets suggests otherwise.
