A.M. Edition for April 23. Global markets breathe a sigh of relief as President Trump signals a softer tone on China tariffs and said he isn’t planning to fire Federal Reserve Chair Jerome Powell. Plus, as Elon Musk hints that his work with the Trump administration could be coming to an end, WSJ reporter Stephen Wilmot explains what that could mean for Tesla. And federal contractors offer billions in cost cuts to win over an administration skeptical about their contributions. Luke Vargas hosts. Sign up for the WSJ’s free What’s News newsletter. Learn more about your ad choices. Visit megaphone.fm/adchoices
Chapter 1: What recent comments did President Trump make about the Federal Reserve?
No, I have no intention of firing him. I would like to see him be a little more active in terms of his idea to lower interest rates. This is a perfect time to lower interest rates. If he doesn't, is it the end? No, it's not.
Those Oval Office comments came after Trump lashed out at the Fed chair last week, writing in a social media post that Powell's termination cannot come fast enough, prompting a sell-off in American assets like the dollar and U.S. treasuries and pushing safe haven assets like gold to a new record high. Trump also said that the 145% tariff on China was too high.
That boosted Japanese and Korean stocks in particular, as tech companies with large exposure to the U.S. market like TSMC and Foxconn rallied on the prospect of a de-escalation in hostilities between Washington and Beijing.
Shares of Tesla are up more than 5% in off-hours trading after the EV maker reported first quarter earnings that included word of a 13% slide in vehicle deliveries and a more than 70% decline in net income. But the headline news is that CEO Elon Musk signaled that his work with the Trump administration could be coming to an end. Stephen Wilmot is the journal's European Autos reporter.
Chapter 2: How is Tesla's stock performing after the latest earnings report?
Stephen, I think the best way for us to understand Tesla's situation now is to hear from Musk himself. So I'm going to play a few clips here from yesterday's earnings call, starting with Musk explaining his early work setting up the Department of Government Efficiency was mostly done. Here he was.
And I think starting probably in next month, May,
Chapter 3: What does Elon Musk say about his work with the Trump administration?
Stephen, was that the answer investors were looking for that might explain Tesla's stock gaining after these results?
Well, I think it almost certainly has something to do with it, with the positive share price reaction. The worry that Musk isn't dedicating enough time to Tesla isn't new, of course, but it's been turbocharged by Doge and the fact that he's spent so much time in Washington.
Chapter 4: What are investors' reactions to Musk's focus on Tesla?
There's also obviously the fact, and this is new, that unlike the time he spent historically on other projects such as SpaceX, his time on Doge has been hugely politically contentious and therefore has carried a bit of a brand risk for Tesla. So I think for both reasons, investors are happy that he's going to be spending a bit less time in Washington, a bit more time on Tesla.
Another factor was that the company confirmed that it was on track to produce a more affordable model in the first half. There had been some rumours that the project was off track, so I think that also was a relief. Coming against the backdrop of very poor delivery numbers, the need for a more affordable model has never been more obvious.
About Tesla's future, Musk was speaking in quite glowing terms about its automotive business, promising that a driverless taxi service from the company would be launching this summer. And he also talked about other business units like the company's AI products, its pivot into robotics. These are things that Tesla has touted for a long time, its non-automotive work.
And yet Musk did try to get more specific here, putting some dates on when he thought this would all start to benefit the company's bottom line. Let's hear that.
That's probably... around the middle of next year, second half of next year. And then once it does start to move the financial needle in a significant way, it will really go exponential from there.
What of that, Stephen? Is the market buying these future profits, this major jump up in valuation, is just around the corner?
Well, to some extent, it clearly is buying it because Tesla still, even after a 40% plus share price fall this year, has a $750 billion market value, which is more than twice than other car makers like Toyota. It is valued like a tech company, not a car company. And that's because investors do give Musk some credit for these pronouncements.
And the one that really moves the needle for Tesla's valuation is AI, robotics, anything he says about Optimus, the humanoid robot, and most particularly what he says about robo-taxis. But his scope for continuing to punt hopes down the road is getting a bit... narrower, and he's now saying that they will deliver actual functional robotaxis with unsupervised self-driving software this summer.
Presumably it will be very limited, backed up by remote drivers in some way. This is deliverable. What might be less deliverable is an actual profitable exponentially growing business line, which he's also obviously just promised. He's saying that will happen next year, next summer.
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Chapter 5: What future developments did Musk promise for Tesla?
So Tesla doesn't actually have that long to come up with a functional robo-taxi business that actually makes profits.
A key spring for Tesla giving way to a key summer. Stephen Wilmot is the journal's European Autos reporter. Thanks so much for stopping by. Thank you. Coming up, U.S. brokered peace talks for Ukraine falter after Kiev pushes back on the proposed terms of a deal and the Trump administration moves to phase out artificial food dyes. We've got those stories and more after the break.
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Three federal judges criticized the Trump administration yesterday over its immigration crackdown, throwing up new legal roadblocks to the White House's no-holds-barred approach.
Two judges in Colorado and New York sharply questioned the legality of the administration's use of wartime measures to speed up deportations of alleged gang members and criticized the lack of legal protections for individuals who've been detained and are slated for removal.
At the same time, a judge in Maryland accused the administration of bad faith in the case of Kilmar Abrego Garcia, a man mistakenly deported to El Salvador. On Monday, the administration declined to answer questions posed by Abrego Garcia's lawyers following a judge's order to facilitate his return.
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Chapter 6: How does Tesla's valuation compare to traditional car makers?
with government lawyers citing attorney-client privilege, state secrets, and diplomatic concerns, and telling the court that questions about his whereabouts and the administration's legal basis for his continued detention are an absurdity. U.S. District Judge Paula Zinnis has ordered the government to provide full responses by 6 p.m. today.
President Trump's efforts to bring an end to the war in Ukraine are on shaky ground after Ukrainian President Volodymyr Zelensky pushed back on a U.S. proposal to recognize Russia's control of Crimea as part of a ceasefire agreement.
American officials had presented a series of ideas for ending the war to Ukrainian officials last week and expected an answer today as Ukrainian, U.S., and European officials gather for a summit in London. Speaking in Kiev, Zelensky said the Crimea proposal was a non-starter.
Ukraine does not legally recognize the occupation of Crimea. There is nothing to talk about. It is outside of our constitution. This is our territory, the territory of the people of Ukraine.
Zelensky added that Ukrainian officials in London today would have a mandate to discuss a partial or full ceasefire, which Ukraine agreed to last month, but Moscow rejected. Secretary of State Marco Rubio has announced a major plan to reorganize the State Department and shrink what he called a bloated bureaucracy and bring it in line with President Trump's America First priorities.
The overhaul will result in the elimination of 700 positions and the closure of 132 of the agency's offices. However, this restructuring doesn't cover the network of U.S. diplomatic missions abroad. Seven of the 10 largest consulting firms to the U.S.
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Chapter 7: What are the expectations for Tesla's robo-taxi service?
government are offering to cut up to $20 billion from their federal contracts after being pushed by the Trump administration to locate deeper price concessions or face consequences. We exclusively report that the proposed cuts include terminating existing contracts and reducing the scope of their work within federal agencies.
with some firms offering discounts on their labor costs, credits towards their work, or AI services free of charge.
Journal reporter Chip Cutter said that if the proposed cuts satisfy the government, it would lift some pressure off the likes of Booz Allen Hamilton, which makes nearly all of its $11 billion in annual revenue from contracts tied to the government, but that the industry isn't in the clear just yet.
There's been a lot of anti-consultant rhetoric throughout the Trump administration. You've heard some Trump administration officials say that they saw consultants as just pushing PowerPoints and creating decks and spreadsheets and not offering much value.
The industry, of course, would say that that's false and they do a lot to sort of modernize the government and to roll out new technology and all of that. You've seen the Department of Government Efficiency regularly announce new cancellations of consulting contracts.
The Department of Defense earlier this month said it planned to cut $5.1 billion in consulting contracts that affected firms like Accenture, Deloitte, and Booz Allen. So you really just see it across the government right now. This real crackdown on the consulting industry is still a little unclear where it all goes from here.
Accenture and Deloitte didn't immediately comment, while a Booz Allen spokesman said the company was working productively with the government, quote, for the benefit of the American taxpayer. And Robert F. Kennedy Jr. has unveiled plans to strip artificial food dyes from the American diet by the end of 2026.
The Health and Human Services Department and Food and Drug Administration will work with the food industry to eliminate petroleum-based synthetic dyes, which Kennedy has blamed for a litany of health problems. Industry groups say the dyes used in their food products have been deemed safe but are nevertheless going along with the order. Journal food reporter Jesse Newman has more.
These dyes are pretty ubiquitous in American grocery stores. There's products that you sort of expect to see them in like candies and cake frosting, but then they're in tons of other categories and products. So this is a pretty huge deal for food companies and for consumers who are used to seeing a lot of products look a certain way.
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