Wall Street’s main indexes have slipped as US President Donald Trump’s latest tariff gambit sent car stocks into a tailspin while investors sifted through a slew of economic indicators.
In a late-night announcement on Wednesday, Trump unveiled his plan to implement 25 per cent tariffs on imported cars and light trucks effective next week while those on car parts are expected to begin from May 3.
Car makers, with sprawling supply chains crisscrossing North America, took a hit.
General Motors fell 8.2 per cent and Ford lost 2.7 per cent.
Car-parts manufacturers like Aptiv and BorgWarner each shed about 6.0 per cent each.
Tesla was up about 0.8 per cent after a 5.6 per cent drop in the previous session.
Shares of Japanese, European and South Korean car makers, who heavily depend on the US as a key export market, also suffered setbacks.
“We believe that he’s using (car tariffs) as a trade negotiation. The markets are jittery because nobody really knows what’s going to happen and what will come out in future,” Nicolas Lin, chairman and interim CEO of Aether Holdings, said.
Trump’s mercurial trade policies have injected a dose of uncertainty into the markets as investors fret over potential disruptions to supply chains, hampered investment and the spectre of inflationary pressures threatening global economic growth.
Trump has also pledged to impose reciprocal tariffs on trade partners in early April although he has intimated that these policies might be subject to flexibility.
Investors fled to safe-haven assets, driving gold to record levels, with bullion miners such a Newmont and Barrick Gold up about 0.5 per cent each.
In early trading on Thursday, the Dow Jones Industrial Average fell 271.87 points, or 0.64 per cent, to 42,182.92, the S&P 500 lost 34.29 points, or 0.59 per cent, to 5,677.91 and the Nasdaq Composite lost 119.69 points, or 0.67 per cent, to 17,779.32.
Ten of the 11 S&P 500 sectors were in the red, with technology leading with a 1.3 per cent drop.
Consumer staples, often seen as a sector that is able to fare better in an uncertain economic environment, inched up 0.4 per cent.
A final estimate showed gross domestic product (GDP) increased by a more than expected 2.4 per cent while weekly jobless claims were broadly in line with estimates.
The highlight of the week’s economic indicators is the personal consumption expenditures price index – the Federal Reserve’s favoured inflation gauge – scheduled for release on Friday.
Investors have trimmed their exposure to US equities, dragging both the S&P 500 and the Nasdaq down by 10 per cent from their record peaks earlier in the month, thus entering technical correction territory.
Both indices are on course to conclude the first quarter of 2025 in negative territory, with the benchmark index poised for its first quarterly decline in six quarters while the tech-centric index braces for its largest quarterly drop in nearly two years.
Fed policymakers, including Susan Collins and Thomas Barkin, are anticipated to share their economic insights later on Thursday.
Among other stocks, Advanced Micro Devices lost 4.5 per cent after Jefferies downgraded the chip stock to “hold” from “buy,” sending the broader chip index down 2.3 per cent.
Declining issues outnumbered advancers by a 2.11-to-1 ratio on the NYSE and by a 1.88-to-1 ratio on the Nasdaq.
The S&P 500 posted seven new 52-week highs and five new lows while the Nasdaq Composite recorded 18 new highs and 91 new lows.
https://thewest.com.au/business/markets/wall-street-slips-as-trumps-car-tariffs-sap-sentiment-c-18182620
