Market OverviewNEW YORK (AP) — Wall Street faced mixed signals on Thursday as President Donald Trump’s latest tariff escalation pressured automakers, while positive economic data helped stabilize the market. The S&P 500 fluctuated throughout the morning, ultimately remaining nearly unchanged. The Dow Jones Industrial Average dipped 33 points (0.1%), and the Nasdaq Composite edged 0.1% lower.
Auto Sector Hit by TariffsTrump’s announcement of a 25% tariff on imported cars weighed heavily on major automakers. General Motors led the decline with a 5.9% drop, while Ford Motor slid 2.1%. Though the tariffs target foreign manufacturers, U.S. automakers are not immune, given their complex North American supply chains.
UBS analyst Joseph Spak noted that while details remain uncertain, the tariffs will inevitably create challenges for automakers. A key concern is how the U.S. government will apply tariffs to vehicle parts sourced from Mexico and Canada under the USMCA trade agreement but not manufactured in the United States. The complexity of tracking such components adds another layer of uncertainty.
Automakers based outside the United States also suffered losses. Honda Motor fell 2.5% and Toyota Motor dropped 2% in Tokyo trading, while Hyundai Motor declined 4.3% in Seoul.
Electric Vehicle Makers Hold SteadyUnlike traditional automakers, electric vehicle manufacturers fared better. Tesla rose 2.7%, and Rivian gained 3.1%, as both companies conduct most of their production in the U.S., insulating them from the direct impact of the new tariffs.
Uncertainty Ahead of "Liberation Day" TariffsInvestors are bracing for further volatility as Trump’s self-declared "Liberation Day" approaches on April 2. The president has promised "reciprocal" tariffs that match trade barriers imposed by U.S. trading partners, including value-added taxes. While there is hope that the final tariffs may be more targeted or less severe, ongoing discussions have already dampened consumer and business sentiment. Any reduction in spending due to economic uncertainty could weigh on growth in the coming months.
Economic Data Provides SupportDespite the market’s tariff-related concerns, economic data offered some support. A report on Thursday showed that jobless claims were slightly lower than expected, reinforcing the notion of a stable labor market. Analysts suggest the U.S. economy may be entering a phase of "low hire, low fire," indicating steady employment conditions.
Additionally, revised data showed that economic growth in the final quarter of 2024 was slightly stronger than previously estimated. This helped keep Treasury yields relatively stable, with the 10-year Treasury yield edging up to 4.36% from 4.35%.
Stock HighlightsBeyond the auto sector, Petco Health & Wellness saw a sharp surge of 33.4% after reporting quarterly results that exceeded analyst expectations. Meanwhile, chipmaker Nvidia and General Motors both experienced declines amid broader market uncertainty.
Global Market PerformanceOverseas markets responded variably to the developments. European markets mostly declined, while Asian indices showed mixed performance. Japan’s Nikkei 225 slipped 0.6% as auto stocks weighed on sentiment. Japanese Prime Minister Shigeru Ishiba called for an exemption from the new tariffs, stating, "We strongly request that tariff measures not be applied to Japan."
In contrast, Chinese markets saw slight gains, with the Shanghai Composite rising 0.1% and Hong Kong’s Hang Seng Index up 0.4%. While Chinese automakers and parts manufacturers have expanded globally, their limited U.S. market presence means they face indirect effects from the tariffs rather than immediate setbacks.
ConclusionAs Wall Street grapples with competing forces—trade policy uncertainties and positive economic indicators—market sentiment remains cautious. Investors will closely watch upcoming policy decisions, particularly the final details of Trump’s tariffs, to gauge the broader impact on global trade and economic growth. Until more clarity emerges, volatility is likely to persist.