Wall Street Mixed Amid Tariff Fears, Growth Signs/ Newslooks/ WASHINGTON/ J. Mansour/ Morning Edition/ Wall Street hovered near flat Thursday as President Trump’s 25% auto tariffs dragged down automakers, but strong economic data helped keep investor confidence afloat. While Ford and GM slumped, Tesla and Rivian rose, and hopes remained that coming tariffs might be softened.
Market Impact of Auto Tariffs: Quick Look
- Indexes Mixed: S&P 500 flat; Dow down 33 points; Nasdaq slightly lower
- Auto Stocks Slide: GM drops 5.9%, Ford down 2.1% on tariff news
- Trump’s Tariff Push: 25% on all imported vehicles, including allies
- EV Stocks Gain: Tesla +2.7%, Rivian +3.1% due to U.S.-based production
- Japan, Korea Hit: Toyota, Honda, Hyundai fall in overseas trading
- Economic Data Strong: Jobless claims lower; GDP revised upward
- Bond Market Steady: 10-year Treasury yield ticks up to 4.36%
- Retail Surprise: Petco jumps 33.4% after better-than-expected earnings
- Global Reaction: European stocks dip; Asia mixed after tariff announcement
Wall Street Mixed Amid Tariff Fears, Growth Signs
Deep Look
Wall Street Balances Auto Tariffs With Strong Economic Signals
Wall Street opened Thursday in a cautious holding pattern, with investors digesting conflicting forces: sweeping auto tariffs from President Donald Trump and reassuring signs from the U.S. economy. The S&P 500 was virtually unchanged by mid-morning, while the Dow dipped 33 points and the Nasdaq eased slightly.
Trump’s announcement of a 25% tariff on all imported vehicles, part of his broader “reciprocal trade” strategy, sent shockwaves through the auto industry. General Motors shares tumbled 5.9%, and Ford followed with a 2.1% drop. Analysts at UBS warned that the tariffs could disrupt supply chains and drive up vehicle prices, even for domestic automakers who rely on foreign parts.
“There are still a lot of unknowns,” said UBS analyst Joseph Spak. “If this remains in place, there will clearly be some pain for the companies to digest.”
Foreign automakers were also hit hard. Hyundai fell 4.3% in Seoul, while Toyota and Honda lost 2% and 2.5%, respectively, in Tokyo. Japanese Prime Minister Shigeru Ishiba urged the U.S. not to impose tariffs on its key trading partner.
Electric vehicle makers proved more resilient. Tesla climbed 2.7%, and Rivian gained 3.1%, buoyed by their largely U.S.-based production operations, which shield them from the bulk of the new tariffs.
Trump’s tariffs, which he has scheduled for April 2—dubbed “Liberation Day”—aim to impose trade penalties that mirror the taxes and duties U.S. exporters face abroad. Though designed to level the playing field, the policy is stoking fears of retaliatory measures and global supply chain disruptions.
Despite the looming threat of a trade war, the U.S. economy continues to show resilience. Weekly jobless claims came in slightly lower than economists had expected, suggesting continued strength in the labor market. Meanwhile, revised data showed GDP growth for Q4 2024 rose to 2.4%, up from previous estimates.
“The labor market appears to be in a ‘low hire, low fire’ holding pattern,” said economist Julia Coronado of MacroPolicy Perspectives. “That’s not bad news—it suggests stability.”
Bond markets took the news in stride, with the 10-year Treasury yield ticking up just one basis point to 4.36%, signaling no major change in investor outlook.
Elsewhere on Wall Street, Petco Health & Wellness saw its stock soar 33.4% after reporting earnings that beat expectations. The retailer credited improved cost controls and a growing customer base.
Overseas, markets reflected unease about the U.S. policy shift. Japan’s Nikkei 225 fell 0.6%, dragged down by losses in the auto sector. In Europe, major indexes opened lower, reflecting worries about ripple effects from the new trade regime.
However, Chinese markets were more upbeat. Shanghai’s main index rose 0.1%, and Hong Kong’s Hang Seng gained 0.4%. Chinese auto firms are still relatively insulated from U.S. tariffs due to limited exposure to the American market.
With less than a week until Trump’s full slate of reciprocal tariffs is expected to take effect, volatility may return to markets that have otherwise appeared stable since a correction earlier this month.
Analysts are watching closely for signs that Trump may scale back the severity of the tariffs, or offer exemptions to strategic partners. Without such moves, the policy could drag on both corporate profits and consumer confidence heading into the second quarter.
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