NEW YORK – U.S. markets struggled for direction on Thursday, ultimately closing lower as President Donald Trump’s latest tariff announcement sent ripples through the auto sector, creating winners and losers.
The S&P 500 slipped 0.3%, fluctuating between small gains and losses throughout the session, while the Dow Jones Industrial Average dropped 155 points (0.4%), and the Nasdaq composite fell 0.5%.
Auto stocks bore the brunt of the volatility. General Motors plunged 7.4%, and Ford Motor declined 3.9%, reacting to Trump’s move to impose 25% tariffs on imported cars. Even U.S.-based manufacturers faced pressure, given their extensive supply chains across North America.
“There are still a lot of unknowns, but if this remains in place, there will clearly be some pain for the companies to digest,” said UBS analyst Joseph Spak.
International automakers also took a hit, with Hyundai (South Korea) dropping 4.3%, Honda (Japan) slipping 2.5%, and Toyota losing 2%.
However, electric vehicle makers fared better, benefiting from domestic production. Rivian surged 7.6%, while Tesla gained 0.4%, after trimming earlier highs.
Retailers linked to vehicle maintenance saw gains, as consumers potentially rethink purchasing new cars. AutoZone climbed 4%, O’Reilly Automotive advanced 3.1%, and CarMax, a used car retailer, rose 2.5%.
Tariff Uncertainty Looms Ahead of ‘Liberation Day’
Markets remain cautious ahead of Trump’s April 2 deadline, when he plans to unveil “reciprocal” tariffs against trading partners. While some investors hope for a more targeted approach, the uncertainty has already impacted consumer and business sentiment.
Despite trade concerns, economic indicators showed resilience. Jobless claims came in slightly lower than expected, signaling a stable labor market, while U.S. economic growth for the final quarter of last year was revised upward.
Also Read: Donald Trump announces new auto tariffs ahead of April 2 deadline
Treasury yields held steady, with the 10-year yield edging up to 4.36% from 4.35%.
Elsewhere, Petco Health & Wellness surged 31.6% after reporting stronger-than-expected quarterly results.
Global Markets React
European markets closed mostly lower, while Asian markets had a mixed session.
- Japan’s Nikkei 225 fell 0.6%, following declines in its auto sector.
- China’s Shanghai index rose 0.1%, and Hong Kong’s Hang Seng gained 0.4%.
Japanese Prime Minister Shigeru Ishiba responded to Trump’s tariff announcement, stating:
“We strongly request that tariff measures not be applied to Japan.”
While Chinese automakers are expanding globally, they remain largely absent from the U.S. market, limiting the immediate impact of the tariffs on their industry.
As Wall Street braces for further tariff developments, investors remain on edge, weighing economic resilience against the uncertainty of escalating trade tensions.