A litany of defense contractors and SpaceX rivals spiked Wednesday afternoon on reports that Elon Musk will soon step down from his role as special advisor to President Donald Trump. Tesla stock also rebounded with its CEO set to return in full force. However, the rally was short-lived as President Trump announced a wave of tariffs on nearly every country.
President Trump in recent days has told members of his Cabinet and inner circle that Musk agreed it is time to return to his businesses and take on less of a supporting role in the administration, Politico reported Wednesday, citing unnamed sources. Musk, who served as a major campaign funder and supporter of President Trump, has taken a role as a special advisor to the White House since the inauguration.
The reports indicate it was a mutual decision between Trump and Musk. But the news comes just one day after Musk-backed candidate Brad Schimel lost the hotly contested Wisconsin Supreme Court election to democrat-backed candidate Susan Crawford. Crawford's victory preserved the narrow liberal majority in Wisconsin's highest court, despite Musk and affiliated groups spending at least $21 million on the race.
Musk also held pre-election rallies and paid three individual voters $1 million each for signing a petition in an effort to drive up turnout.
The SpaceX CEO also launched and led the Department of Government Efficiency, which has either gutted or entirely eliminated a broad range of government programs and departments.
Musk Responds
In recent months, Musk has acted as the spokesperson for DOGE, after the White House in February announced that Amy Gleason is the acting administrator for the agency.
Musk on Wednesday afternoon disputed the report online, calling it "fake news." Press Secretary Karoline Leavitt called it "garbage," saying that Musk will depart his role once his work at DOGE is complete.
The DOGE initiative was originally set to continue to July 4, 2026. And Musk last week in a Fox News interview said that he is confident that he would complete the bulk of goal to cut $1 trillion in federal spending by the end of his 130 days in the role.
Defense Stocks, SpaceX Rivals Spike
Meanwhile, shares of defense contractors and aerospace firms swung higher, as Musk's exit implied a possible end to the carving into government spending. The stocks broadly fell early Thursday following the tariff news.
Booz Allen Hamilton and CACI International both popped more than 5% Wednesday. BAH stock fell 1% Thursday, CACI ticked up a fraction.
Kratos Defense and Leidos Holdings both advanced about 6% or more. Both stocks fell more than 2% Thursday.
Among SpaceX competitors, Rocket Lab jumped 6.6%. Intuitive Machines gained 11.2% Wednesday. AST SpaceMobile rose 2.6%.
ASTS stock fell 3.7% Thursday, while Rocket Lab and Intuitive Machines fell 7.5% and 9.2%, respectively.
Archer Aviation climbed 3.5% Wednesday, but reversed for a 3.6% drop Thursday.
Tesla stock fell 5.5% Thursday, erasing its 5.3% jump from Wednesday.
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