Political Drama Rocks Markets: Trump-Musk Feud Amid Trade Tensions | Weekly Analysis (June 9-13, 2025)

Market Sentiment Overview

Markets face a volatile week as the Trump-Musk feud escalates following Elon’s departure from DOGE, with Trump threatening to terminate government contracts. At the same time, Musk vows to decommission the SpaceX Dragon spacecraft. US-China trade tensions resurged after Trump doubled steel/aluminum tariffs to 50%, though talks resumed following a Xi Jinping phone call. The S&P 500 hit the psychological 6,000 level (+1.5% weekly) despite Tesla’s 15% plunge, while oil rebounds 4% on supply disruptions and seasonal demand.

Currencies

EUR/USD: ECB Hawkish Cut Supports Euro (1.1400)

Current Trend:Consolidative Market Sentiment:Cautiously Positive

EUR/USD flirted with 1.1500 before settling around 1.1400 after a choppy first week of June. The ECB delivered a “hawkish cut,” reducing rates by 25bps as expected, but President Lagarde signaled the central bank is “close to the end of its monetary policy cycle.” This hawkish tone temporarily boosted the Euro despite ongoing trade war uncertainties. ECB policymaker Centeno noted that US tariffs will have a “deflationary effect” in the Eurozone, potentially bringing inflation near the dangerous 1% level by early next year. Focus shifts to German HICP data Friday and continued trade headline volatility.

Resistance: 1.1480; 1.1610

Support: 1.1278; 1.1162

GBP/USD: Bulls Eye 1.3600 Break (1.3580)

Current Trend:Bullish Market Sentiment: Positive

GBP/USD briefly retested offers above 1.3600, hitting the highest level since February 2022 before consolidating. The Pound showed resilience against USD weakness, with technical analysis validating a Bull Pennant pattern and RSI remaining well above the midline. UK labor market data on Tuesday and monthly GDP on Thursday will be key catalysts. The pair capitalized on broad-based Dollar weakness early in the week amid renewed US economic and trade policy concerns. Support at 1.3500 remains intact with bulls targeting a decisive break above 1.3600.

Resistance: 1.3613; 1.3739

Support: 1.3444; 1.3316

USD Index: Political Chaos Weighs on Dollar (99.20)

Current Trend: Weak Market Sentiment:Negative

The Dollar tested six-week lows as political drama and trade wars dominated headlines. Despite Friday’s solid NFP report (139K vs 130K expected), the DXY struggles to keep above 99.00. The Trump-Musk feud added unprecedented uncertainty, with threats to terminate government contracts and decommission space programs. May CPI data, Wednesday emerges as the week’s key catalyst, with expectations for headline inflation to rise to 2.5% from 2.3%. The Fed enters blackout period Saturday ahead of June 17-18 meeting, limiting guidance until then.

Resistance: 99.90; 101.32

Support: 97.60; 96.24

Stocks

S&P 500: Breaks 6,000 Despite Tesla Plunge (6,000.36)

Current Trend: Bullish Market Sentiment: Resilient

The S&P 500 rose 1.5% to break above the psychological 6,000 level, continuing momentum from May’s 6.2% surge. Strong NFP data provided support despite political turmoil. Communication services led gains (+3.2%) with Meta surging 7.8% on a 20-year nuclear energy deal with Constellation Energy. The technology sector rose 3%, led by Micron Technology (+15%) on improved outlook and receding tariff risks. Energy (+2.2%) and materials (+1.4%) also outperformed. The index is now up 2% for 2025.

Resistance: 6053.30; 6137.40

Support: 5869.14; 5781.79

Tesla (TSLA): Political Fallout Hits Hard (-15%)

Current Trend: Bearish Market Sentiment: Very Negative

Tesla plummeted 15% as the Trump-Musk feud intensified, weighing down the consumer discretionary sector (-0.6%). After Musk called Trump’s “Big Beautiful Bill” a “disgusting abomination” and claimed “without me, Trump would have lost the election,” Trump threatened to terminate government subsidies and contracts. Musk’s retaliatory threat to decommission the SpaceX Dragon spacecraft added to the uncertainty. The stock faces continued pressure from the escalating political drama between the two key figures.

Resistance: 322.49; 363.22

Support: 271.40; 226.22

Adobe (ADBE): Earnings Anticipation Builds (+7% Monthly)

Current Trend: Recovering Market Sentiment:Cautiously Optimistic

Adobe shares gained momentum ahead of Thursday’s Q2 earnings report, rising 7% over the past month despite a challenging six-month period (-20%). Analysts expect adjusted EPS of $4.97 and revenue of $5.8 billion, representing growth from $4.48 and $5.31 billion year-over-year. The company’s AI monetization strategy and continued product innovation position it well for the creative sector boom. Management reaffirmed guidance, showing confidence in long-term AI-driven growth prospects.

Resistance: 430.67; 452.07

Support: 395.73; 374.14

Commodities

WTI Crude Oil: Rebound Gains Momentum (63.15)

Current Trend: Bullish Market Sentiment:Improving

WTI crude posted its first weekly gain in three weeks, rising 4% to $63.15 as summer driving season demand optimism outweighed oversupply concerns. Canadian wildfires temporarily disrupted 7% of oil production, providing early-week support. Saudi Arabia sent mixed signals, proposing OPEC+ production increases of 411,000 bpd from August while slashing July Asian selling prices to four-year lows. Technical indicators suggest bullish momentum with key resistance at $63.95 – a confirmed break could signal a stronger upward trend. Support holds at $63.08.

Resistance: 66.88; 70.28

Support: 61.23; 57.98

Gold: Struggles Above $3,400 Despite Safe-Haven Demand (3,380)

Current Trend: Neutral/Volatile Market Sentiment: Uncertain

Gold started the week strong (+2.5% Monday) on safe-haven flows from trade tensions and geopolitical risks (Ukraine’s drone attacks on Russian Siberia), but failed to stabilize above $3,400. The ECB’s hawkish cut triggered a sharp XAU/EUR decline as capital flowed toward the Euro. Trump’s phone call with Xi Jinping and renewed trade optimism pressured safe-haven demand. Friday’s solid NFP data provided additional headwinds. The technical outlook remains unclear with May CPI data on Wednesday and trade developments driving near-term direction.

Resistance: 3404.69; 3501.18

Support: 3240.15; 3154.78

Key Events This Week (June 9–13, 2025)

Critical Economic Releases

• Monday: China Trade Balance, CPI (-0.2% expected), PPI data
• Tuesday: UK Labor Market Report (unemployment expected at 4.6%)
• Wednesday: US CPI for May (headline 2.5% expected, core 2.9%) – Week’s highlight
• Thursday: UK Monthly GDP, US PPI, Adobe (ADBE) earnings, Weekly Jobless Claims
• Friday: German HICP for May, US Michigan Consumer Sentiment, inflation expectations

Political & Trade Developments

• Ongoing: Trump-Musk feud escalation and government contract implications
• US-China: Follow-up to Xi Jinping call, expected team meetings within seven days
• Trade Deadlines: Various partner negotiations with midweek deadlines
• Fed Blackout: Period begins Saturday ahead of June 17–18 FOMC meeting

Week Ahead Outlook

Wednesday’s US CPI data takes center stage with markets expecting inflation acceleration to 2.5% headline and 2.9% core – the first major test of tariff impact on prices. The Trump-Musk political drama introduces unprecedented uncertainty to markets, particularly affecting the Tesla and space and government contracting sectors. Oil’s technical breakout attempt at $63.95 and EUR/USD’s potential push toward 1.1600 remain key technical themes.