Elon Musk said Tuesday that boards at Tesla Inc. and SpaceX are discussing a potential merger that would create a combined company valued at about USD 3.5 trillion, a jaw-dropping proposal that, if pursued, would reshape the landscape for autos, aerospace and artificial-intelligence investments.
The comment landed amid a broader market scramble over technology valuations and rising sovereign yields. Citadel founder Ken Griffin’s warning that artificial intelligence may be in a bubble drew swift pushback from finance leaders including Deutsche Bank’s Christian Sewing and BlackRock’s Larry Fink, underscoring a split between traders betting on AI’s long-term upside and executives urging caution.
The ripples extended into fixed income: France’s 10-year yield climbed to 5% for the first time since 2002 as investors grew anxious about contentious budget talks and lingering social unrest, pushing sovereign debt risk premiums higher across parts of Europe.
On the corporate calendar, heavyweights reporting results or updates Tuesday include Tesla, Meta Platforms, AT&T, CME Group and IBM, a slate that has helped keep trading choppy. U.S. equities were mixed, with investors rotating into value sectors such as health care while technology shares lagged after a rebound on Monday.
Global risk appetite showed a patchwork pattern. European and Japanese stocks advanced between 0.5% and 1%, while mainland China and Hong Kong markets fell about 1%. U.S. futures pointed to modest gains. Commodities were firmer: Brent crude rose roughly 2% to USD 111 a barrel.
In geopolitics and trade, German Chancellor Friedrich Merz said the European Union should, ideally, avoid opening a new front of trade measures against China but vowed the bloc would defend itself against what he described as a “new dimension” of aggressive commercial practices from Asia’s largest economy.
M&A and capital markets activity also made headlines: Danish brewer Carlsberg is reportedly close to a public filing for a USD 700 million initial public offering, signaling continued appetite for consumer-beverage assets despite market volatility.
Markets are parsing conflicting signals — blockbuster corporate maneuvers and AI optimism on one hand, rising yields and political risk on the other — leaving investors weighing growth prospects against a higher-cost-of-capital backdrop.
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