The political bromance that helped elect Donald Trump came crashing down spectacularly in early June, only to be hastily rebuilt just days later.
The dramatic Trump-Musk arc from alliance to all-out war to grudging reconciliation, has unfolded against the backdrop of prediction markets that are now pricing in just how volatile this relationship truly is. Kalshi’s real-money trading markets are painting an intriguing picture of two larger-than-life figures whose political fortunes may be more precarious than many expected.
Trump vs. Musk markets: How’d we get here?
What began as a dispute over Trump’s sweeping tax-cut and spending bill on June 3rd exploded into a full-scale digital warfare by June 5th, with Elon Musk launching personal attacks against Trump, culminating in a claim, made without evidence, that Trump is in the “Epstein files.”
The feud reached its crescendo when Trump said a review of Musk’s extensive contracts with the government was in order, while Tesla shares closed down 14 %, losing about $150 billion in value. By June 6th, Trump said that he had no plans to speak with Musk, signaling the president and his former ally might not resolve their feud.
Then came the reconciliation. A Friday call with JD Vance and Susie Wiles on June 7th marked the beginning of Musk’s retreat. By June 11th, Musk had quietly deleted some of his inflammatory tweets about Trump, and tweeted that he regrets some of his posts last week about the man he spent nearly $300 million to elect. In a podcast episode released Wednesday, Trump said he was disappointed in Musk but had “no hard feelings.”
The administration: Long odds on a Musk return
Despite Musk’s prominent role in Trump’s 2024 campaign and his continued influence in conservative circles, bettors are giving only a 14% chance as of Friday that the Tesla and X owner will formally rejoin the Trump administration this year. This surprisingly low probability suggests market participants see significant barriers to Musk taking an official government role.
The skepticism likely stems from what markets just witnessed firsthand. Musk’s willingness to publicly torch the relationship over policy disagreements demonstrates the fragility of their alliance. His sprawling business empire presents obvious conflict-of-interest challenges, particularly given Trump’s threat to review Musk’s extensive government contracts during their June spat.
The recent feud also highlighted a fundamental incompatibility: both Trump and Musk are accustomed to being the center of attention. The prediction market seems to reflect fresh doubts about whether two such dominant personalities can coexist within the formal structure of government, especially after their June meltdown proved how quickly mutual admiration can turn to mutual destruction.
The approval gamble on Musk’s popularity
Perhaps more telling is the market’s assessment of Musk’s public standing. Traders are currently placing 48% odds that his approval rating will fall below 35% before year’s end, a threshold that would put him in deeply unpopular territory.
This bearish outlook on Musk’s popularity directly reflects the fallout from the June drama. The billionaire’s willingness to wage public war against the president he spent $300 million to elect shocked political observers and market participants alike. Musk’s deleted posts included accusations that escalated the bitter feud with President Donald Trump this week, including one that accused Trump of being mentioned in “files” of the late sex offender Jeffrey Epstein.
The prediction market appears to be betting that Musk’s transition from tech innovator to political combatant will prove costly to his public image. The June feud demonstrated how quickly he can shift from ally to adversary, raising questions about his political judgment and stability that markets are now pricing into his approval ratings.
Trump’s approval is a weekly bet
Meanwhile, Trump’s own approval ratings have found a narrow but stable range. Kalshi’s weekly market on Trump’s approval rating is projecting his RealClearPolitics rating at 11 a.m. ET June 20 will land below 47.0%. This week, the same market resolved “yes” for the 46.6% and 47.0% range, with the final number settling at 46.8%.
This stability stands in contrast to the volatility surrounding Musk. While Trump’s approval has historically swung dramatically based on news cycles and major events, the early months of his second term appear to have settled into a more predictable pattern, at least for now. Weekly and daily betting markets reflect this new normal, with traders making fine-grained predictions within a relatively narrow band.
