Investors held onto hopes that the U.S. and Japan’s trade agreement could lead to a tariff breakthrough with other countries, and pushed the S&P 500 and Nasdaq Composite to fresh record highs.

Nelson downgraded the company’s stock to a neutral rating in April. But even some of the Tesla bulls on Wall Street are saying that the time for Musk to take action is running out.

Tesla is facing stiffer competition globally from electric vehicle players, especially low-cost competitors from China.

Tesla (NASDAQ: TSLA) closed down 8.2% at $305.30 on Thursday, retreating sharply after CEO Elon Musk's cautionary earnings commentary about "rough quarters ahead" amid macroeconomic and electric vehicle (EV) demand uncertainties.

Tesla's market cap fell below $1 trillion, but it still reflects investors' assumptions of enormous future growth.

Small caps cooled down after recent hot gains, leading the Russell 2000 down 0.7%. Trading near 2,270, the Russell remains up 1.3% for the week. On the Nasdaq, losers led winners by a 5-to-3 margin. The New York Stock Exchanged chalked up 1,756 stocks down and 1,043 issues up.

Wall Street kicked off Thursday with a split mood, as US stock market futures painted a mixed picture ahead of the opening bell. The S&P 500 held steady near record highs, the Nasdaq pushed higher on the back of red-hot AI enthusiasm,