The rift between President Donald Trump and Tesla chief Elon Musk has captivated the world as a political drama, but it has also become a Wall Street spectacle, highlighting the risk to equity markets from the world's biggest stocks.

Elon Musk’s bitter falling-out with President Trump could be costly for Tesla. As long as he is persona non grata in the Trump administration, Mr. Musk, the chief executive of Tesla, will struggle to persuade Republicans not to gut climate policies worth billions of dollars to the electric car and battery company.