On May 5, U.S. President Donald Trump held a call with Chinese President Xi Jinping, leading to short-lived hopes for progress in U.S.-China trade talks. However, the major U.S. stock indices closed lower that day, suggesting investors remain skeptical about the tangible outcomes of the conversation. Additionally, a public feud between Trump and Tesla CEO Elon Musk led to a staggering 14% drop in Tesla's share price.

Reports indicate that the call caused fluctuations in the stock market, with Trump stating on his own social platform that the conversation with Xi was "very good," yet he did not provide specifics on any outcomes achieved. While there was mention of a future meeting between the trading teams, the likelihood of actual transactions between the U.S. and China remains uncertain.

Jay Hatfield, CEO of Infrastructure Capital Advisors, noted that while both parties have released positive signals regarding negotiations, the chances of achieving a trade agreement with the U.S. remain lower than those with other nations like India and Japan.

Moreover, the latest employment data has raised concerns about the weakening labor market, as 247,000 people applied for unemployment benefits in the last week, exceeding previous estimates. The private sector's job growth for May also fell significantly short of predictions, further intensifying market caution ahead of the upcoming non-farm employment data.

At the close on May 5, the Dow Jones Industrial Average fell 108 points to 42,319.74; the Nasdaq Composite dropped 162.04 points to 19,298.45; the S&P 500 declined by 31.51 points to 5,939.30. Tesla's stock dropped due to the escalating dispute between Musk and Trump, leading to a market capitalization loss of $152 billion, dropping below the $1 trillion mark.