Friday morning was volatile for the stock market, which moved between negative and positive territory several times. The sentiment battle between strong U.S. economic prospects and the threat of a prolonged trade conflict with China whipsawed investors from one extreme to the other. As of 11:45 a.m. EDT, bearish investors were in the ascendancy, with the Dow Jones Industrial Average (^DJI 0.23%) down 5 points to 25,858. The S&P 500 (^GSPC 0.80%) gave up 4 points to 2,873, and the Nasdaq Composite (^IXIC 1.14%) lost 30 points to 7,868.

Two major companies in the U.S. face very different challenges, but each will have to figure out the best way to move forward and preserve its opportunities for long-term growth. For Tesla (TSLA 0.38%), details about a fatal crash and moves to tighten cost controls in order to reduce the size of recent losses are just the latest in the electric-vehicle specialist's long saga of trying to overcome adversity. At the same time, Starbucks (SBUX -1.83%) has a key competitor in China making news today, and negative attitudes among Chinese consumers due to trade disputes could well give the up-and-comer an advantage over the Seattle-based coffee giant.

A bumpy road ahead for Tesla

Shares of Tesla fell 4% in the wake of several pieces of bad news for the electric-vehicle maker. The one drawing the most attention from investors involved a report from the National Transportation Safety Board that found that the company's Autopilot driver-assistance system was active when a Tesla Model 3 crashed in Florida, killing its driver.

Blue sedan on a road in front of a scenic landscape of rolling hills and hazy skies.

Image source: Tesla.

According to the NTSB report, the vehicle was driving well above the posted speed limit and failed to stop despite having advanced driver assistance features engaged, including automatic emergency braking. As a result, the vehicle collided with a semitractor-trailer truck that was crossing the road in attempting to make a left turn.

Amid the liability concerns that the crash report raised, Tesla is implementing new controls on expenses. CEO Elon Musk and his executive team will review future expenses before they're made as the company seeks to preserve capital as it continues to lose money. With the share price at multiyear lows, Tesla's decision earlier this month to move forward with a secondary offering of stock and convertible notes seems like a smart decision in hindsight. Amid uncertainty on multiple levels, the automaker might well have been better off accepting a dilutive price to get valuable capital it can use to sustain itself in the future.

Starbucks prepares for Luckin

Meanwhile, Starbucks saw its stock climb a fraction of a percent, remaining near all-time highs. Yet it's one of the coffee company's major new competitors that's getting the lion's share of investor attention today, as China's Luckin Coffee (LKNC.Y -1.59%) debuted on the Nasdaq Stock Market.

Luckin's IPO priced at $17 per share, but it quickly jumped to gains of 40% to 50% once it began trading in the late morning hours. Shareholders are excited about the company's ability to cash in on the immense Chinese consumer market, especially as an improving standard of living opens up status purchases like gourmet coffee to a wider audience.

Many have worried about Luckin's impact on Starbucks and its plans for growth in the world's most populous country. Starbucks still maintains plans to open 500 stores per year between now and 2021, but the pace of Luckin's expansion has been even faster -- and new capital from an initial public offering could help to sustain that pace of growth.

It's highly likely that the Chinese market is big enough to support both Luckin and Starbucks, and it's entirely possible that having both competitors in the same market could lead new customers to try out both in an effort to find their favorite. That could play well for both companies going forward -- and give Starbucks a chance to win the Chinese market on merit, as well as by using its substantial financial resources.