Wall Street Responds To ‘America Party’; Musk Denies, Calls Party Filing ‘Fake News’

Tesla shares tumbled in premarket trading in New York as investors weighed Elon Musk’s move to launch the new “America Party,” just one day after President Trump signed a tax-cut and spending bill into law—legislation Musk had publicly denounced. Although Musk has denied founding the party, calling the reports “fake news,” the market appears unconvinced.

Tesla’s stock, already down 22% year-to-date as of Thursday’s close, is poised to lose another 7% if premarket losses carry into the cash trading session.

Wall Street analysts are concerned that Musk is “diving deeper into politics,” which could damage the brand, weaken demand, or further distract him from Tesla’s core EV and robotics units.

Here’s what some on Wall Street are saying, via Bloomberg:

Wedbush (Dan Ives)

“Very simply Musk diving deeper into politics and now trying to take on the Beltway establishment is exactly the opposite direction that Tesla investors/ shareholders want him to take during this crucial period for the Tesla story”

With the autonomous future ahead and the AI revolution in full force, Musk should avoid acts of provocation. Trump can create more hurdles for Musk as well as Tesla and SpaceX if the political battle intensifies heading into mid-term elections in 2026

“We remain firmly bullish on Tesla’s AI future but clearly this is not the news we want to see as it adds another perceived overhang to the stock”

Maintains outperform on stock with a price target at $500

Global X ETFs (Billy Leung)

“This probably isn’t what Tesla investors were hoping for. Musk just got back to focusing on the business and the stock was rallying. Now he’s dragging it into another political headline cycle”

For the stock, the move raises noise and volatility in the short term while long term, the core thesis for Tesla is still about AI, robotics, and autonomy — the political distractions don’t really dent that

Rayliant Global Advisors (Jason Hsu)

This may be Musk’s best route to protect what he has built once he realizes that his relationship with Trump has soured beyond repair. Without gaining meaningful political power, Musk and his companies remain exposed and highly at risk

“Backing a few select congressional candidates won’t do enough to give Musk political protection. But forming a party and aiming to play the middle is a much bigger game with a significantly larger impact and payoff”

For the shares, expect some initial volatility as some investors would be concerned with Musk’s distraction and many probably don’t see this as the best move to protect Tesla from the wrath of the Trump administration

Goldman analyst Nelson Armbrust provided clients with a summary of the weekend events:

Musk said on Saturday that a new “America Party” he’d been threatening to launch was formed, a day after Trump signed a tax-cut and spending bill into law that Musk had denounced. He didn’t provide details of the political party and there’s no immediate indication that he has filed official paperwork. Tesla’s stock, which has lost more than 20% this year, is poised to fall further: The company’s shares slumped as much as 7.6% in premarket trading on Monday.

Armbrust also shared a chart with clients, highlighting Tesla’s price action during the “good times” of the Musk-Trump relationship, pinpointing the inflection point where tensions began to deteriorate, which corresponded with a drag on the share price.

Musk has voiced deep frustration with GOP lawmakers over their failure to codify DOGE cuts and President Trump’s “Big Beautiful Bill,” which was signed into law on Independence Day. By Sunday, Musk’s team submitted a filing to create the America Party…

BREAKING – FEC paperwork has been filed to create the “America Party,” but the listed treasurer is an Indian-born man named Vaibhav Taneja. pic.twitter.com/re9bmLdnxv

— Right Angle News Network (@Rightanglenews) July 6, 2025