US Stock Market LIVE: Wall Street Slips as H2 2025 Begins; Tesla Drops, Powell Cites Tariff Impact

The US stock markets slipped on Tuesday, marking a cautious start to the second half of 2025. After consecutive record highs in recent sessions, investor sentiment cooled, leading the S&P 500 down 0.3%, the Nasdaq Composite lower by 0.5%, and the Dow Jones dipping by 21 points in early trade.

Tesla Leads Market Drag as Musk-Trump Rift Deepens

Tesla shares plunged 6.9%, becoming the biggest drag on the S&P 500. The decline followed former US President Donald Trump's remarks on Truth Social, where he hinted at reviewing government contracts and subsidies tied to Elon Musk’s companies. Once considered allies, the deteriorating relationship between Musk and Trump continues to weigh on investor confidence. Tesla has already shed over 21% in market value year-to-date.

Adding to Tesla's turmoil, reports confirmed that CEO Elon Musk will oversee US and European sales operations following the exit of senior executive Omead Afshar. Musk and Tom Zhu are now splitting responsibilities, with Zhu focusing on Asia and global manufacturing.

Powell Confirms Tariffs Delaying Rate Cuts

Speaking at an ECB forum in Portugal, Federal Reserve Chair Jerome Powell confirmed that the central bank would have likely cut interest rates had it not been for the inflationary impact of President Trump’s tariff announcements. Powell emphasized that all inflation forecasts spiked due to the proposed levies, forcing the Fed to pause its rate-easing plans.

Global Highlights

Euro-Zone Inflation Reaches ECB’s 2% Target

According to Eurostat, Eurozone inflation hit 2% in June, meeting the ECB's target. Core inflation held at 2.3%, while services inflation edged up to 3.3%. The report may influence the ECB’s decision to halt further interest rate cuts.

Oil Prices Edge Up Ahead of OPEC+ Decision

Crude oil prices slightly rebounded, with Brent near $67 and WTI above $65, as markets await the weekend's OPEC+ meeting, where a production quota increase is likely. A weaker US dollar also supported prices.

Wolfspeed Files for Bankruptcy

Wolfspeed Inc., a struggling semiconductor firm entangled in the political battle over tech subsidies, filed for Chapter 11 bankruptcy. The company plans to slash $4.6 billion in debt through a restructuring agreement supported by major creditors, including Japan’s Renesas Electronics.

Other Key US Stock Market Developments

Microsoft and Premier League Deal: Microsoft inked a five-year AI and cloud computing partnership with the Premier League, aiming to enhance fan engagement and streamline digital infrastructure using Azure and AI-powered tools.

Biotech Investment Boost: KKR-backed Catalio Capital Management raised $400 million for its latest biotech fund, despite challenges in VC fundraising across the sector.

Crypto ETF from UniCredit: Italy’s UniCredit announced a structured product linked to BlackRock’s Bitcoin ETF, offering capital protection to institutional clients, reflecting growing demand for regulated digital assets.

Visa & Mastercard Face Crypto Disruption: Stablecoins are increasingly seen as a threat to traditional card networks, with $253 billion in transaction volume potentially at stake. Visa and Mastercard are now exploring collaborations with digital currency providers to retain relevance.

Retail Frenzy in Risky Stocks: Analysts note a "dash to trash" trend as retail investors pour money into high-risk segments. Bitcoin-linked stocks, meme stocks, and quantum tech shares surged in Q2, raising sustainability concerns.

Turkey Signals Loan Growth Easing: Turkey is considering raising the cap on SME loan growth—a move interpreted as a first sign of monetary easing amid a 63% commercial lending rate.

UnitedHealth-Sloan Kettering Dispute Ends: The high-stakes contract dispute between UnitedHealth and Memorial Sloan Kettering was resolved at the last moment, ensuring continued care for nearly 19,000 patients.

Saudi’s Ninja Becomes Unicorn: Saudi fast-delivery startup Ninja reached a $1.5 billion valuation after raising $250 million in a round led by Riyad Capital, positioning for an IPO by 2027.

California Real Estate Faces Liquidation Risk: A real estate empire in California, once valued at $360 million, faces forced liquidation due to ownership disputes and bankruptcy court intervention.

Conclusion:

Wall Street is off to a shaky start in H2 2025 amid geopolitical tensions, central bank caution, and leadership shakeups in major firms like Tesla. Investors are advised to monitor developments in US-China tariffs, upcoming OPEC+ decisions, and Q2 earnings season for market direction.