Stocks fell on Thursday as investors digested new tariff news from President Trump. His new tariffs target foreign automakers. The Dow Jones Industrial Average dropped by 216 points, or 0.5%. The S&P 500 lost about 0.3%, while the Nasdaq Composite shed 0.4%.
Shares of several automakers declined following Trump’s announcement. He revealed a 25% tariff on cars not made in the U.S. This tariff will take effect on April 2. General Motors fell 7%, Stellantis dropped 2%, and Ford slipped 3%. Tesla, however, gained 1.5%.
Tesla is seen as a potential beneficiary of Trump’s tariffs. The company produces cars domestically, unlike its competitors. Wall Street analysts view Tesla as a relative winner in this scenario. They believe Tesla may benefit from the new tariffs on foreign automakers.
Trump has long discussed imposing tariffs on countries with their own import duties. He reaffirmed this stance on Wednesday, announcing that tariffs will be permanent for his second term. Investors are unsure how these tariffs will impact the broader economy.
Despite these concerns, Trump provided some relief to investors. He mentioned that the upcoming April 2 tariffs would be “very lenient.” Trump also said he would reduce tariffs on China to help a deal with ByteDance’s TikTok. This statement eased some investor fears, though concerns remain about the impact of these tariffs.
Trump also warned the European Union and Canada. He threatened to impose “far larger” tariffs on them. This would happen if they cooperate on trade tariffs. His aggressive stance keeps investors on edge, worried about future economic repercussions.
The broader U.S. economy is already showing signs of weakness. Investors are nervous about the long-term effects of these policies. Sameer Samana from Wells Fargo shared his concerns. He said the scattershot nature of the policies worries investors.
“The approach taken by DOGE may cause something to fall through the cracks,” said Samana. He suggested the uncertainty is affecting investor confidence. He believes that clarity would ease investor fears.
He also suggested that clarity might help the economy regain stability. If the tariff framework becomes clear soon, he said, decisions would become easier. He thinks this uncertainty could be a short-term issue.
The major indexes showed marginal gains this week. The S&P 500 has risen nearly 0.8%. The Nasdaq gained 0.5%, while the Dow added 1%. However, investors remain cautious as they weigh the potential impact of these new tariffs.
The market is in a wait-and-see mode. Investors are hoping for more clarity in the coming weeks. Some believe the tariffs might just be a temporary obstacle. If clarity arrives, the market could return to a positive trajectory.
