4:12pm: Auto tariffs hit stocks
US stocks closed lower on Thursday as President Trump’s announcement of new auto tariffs pressured market sentiment.
The Dow fell 155 points (0.4%) to 42,300, the S&P 500 dropped 19 points (0.3%) to 5,693, and the Nasdaq slid 95 points (0.5%) to 17,804.
The 25% tariff on imported vehicles and light trucks, announced Wednesday, heightened trade tensions and weighed on automakers like General Motors and Ford. Tech stocks also struggled, with Nvidia and Tesla seeing declines earlier in the week.
The S&P 500 and Nasdaq are on track for a negative first quarter, a reversal from previous strength. Investors await Friday’s release of the Fed’s preferred inflation gauge, the PCE price index.
3:45pm: Thursday's headlines
The US economy grew at an annualized rate of 2.4% in the fourth quarter of 2024, a slight upward revision from the previously estimated 2.3%.
The announcement of a 25% tariff on foreign-made automobiles by President Trump has sent ripples through the global automotive industry.
Petco (NASDAQ:WOOF) shares surged 36% after the pet retailer projected better-than-expected adjusted earnings for fiscal 2025.
23andMe (NASDAQ:ME) shares rebounded more than 60% on Thursday after a US judge confirmed the genetic testing company is allowed to sell customer data as part of its Chapter 11 bankruptcy proceedings.
3:11pm: Goldman Sachs raises gold price forecast
Goldman Sachs has raised its gold price forecast to $3,300 per ounce by the end of 2025, driven by rising demand from central banks diversifying their reserves and reducing reliance on volatile currencies like the US dollar.
Analyst Antonio DiGiacomo at XSsignificant noted capital inflows into gold-backed exchange-traded funds (ETFs) from both institutional and retail investors have fueled price growth.
Inflation concerns are also contributing to gold’s value, as it remains a reliable hedge against rising costs and the loss of purchasing power, DiGiacomo added.
2:15pm: Stocks struggling
Stocks are struggling amid trade policy uncertainty and slowing growth projections, with sentiment weakening among both investors and businesses, according to Adam Turnquist, Chief Technical Strategist for LPL Financial.
However, Turnquist noted that economic data remains resilient, and policy measures like deregulation and tax relief could offset some tariff-related pressures. LPL Research views the market correction as a temporary growth scare rather than a precursor to recession.
"Stocks are struggling to find solid footing against a backdrop of tariff policy uncertainty and slowing growth projections. Damage to sentiment has expanded beyond the investor class, as survey data continues to show that consumers and businesses are becoming less optimistic about the economy," Turnquist commented.
"Fortunately, hard economic data is holding up relatively well, while deregulation, tax relief, and more accommodative monetary policy could help mitigate the adverse effects of higher tariffs."
1:11pm: Wall Street in the red
By early afternoon, the major US stock indexes are experiencing a modest decline, reflecting ongoing concerns about economic growth and trade policies.
The Dow is down by 0.4%, weighed down by economic uncertainty and the anticipation of new tariffs. Similarly, the S&P 500 has dropped 0.3%, mirroring broader market sentiment.
The Nasdaq also shed 0.3%, with tech stocks remaining volatile amid global economic headwinds.
12:07pm: Q4 GDP revised upwards
The US economy grew at an annualized rate of 2.4% in the fourth quarter of 2024, a slight upward revision from the previously estimated 2.3%, the Commerce Department said on Thursday.
However, a widening trade deficit and the impact of new tariffs are expected to weigh on growth in early 2025.
The revision reflected stronger fixed investment and government spending, which offset a downward adjustment to services consumption. Core real GDP, which strips out trade and inventories, remained unchanged at 3% annualized.
11:35am: Initial jobless claims
US initial jobless claims came in at 224,000, slightly below the 225,000 estimate and revised prior figure. Continuing claims fell to 1.86 million, below expectations of 1.89 million.
Oregon, Kentucky, and New York saw the largest increases in claims, while Michigan, Texas, and Mississippi recorded the biggest declines.
"Nothing to see here on initial jobless claims--the labor market is far stronger and resilient than folks appreciate," said Jamie Cox, Managing Partner for Harris Financial Group.
"It's important to note that not only job changes result in unemployment--there are a ton of people retiring right now."
10:50am: Stocks back in green
Stocks clawed back on Thursday morning as investors digest the impact of President Trump's auto tariffs.
The Dow was flat, the S&P 500 up 0.3% and the Nasdaq up 0.4%.
That hasn't stopped general investor frustration, however.
"In our view these initial tariffs (if they hold in their current form) would be a hurricane-like headwind to foreign (and many US) automakers and ultimately push the average price of cars up $5k to $10k depending on the make/model/price point," Wedbush analysts wrote.
"We continue to believe this is some form of negotiation and these tariffs could change by the week although this initial 25% tariff on autos from outside the US is almost an untenable head scratching number for the US consumer."
9.55am: Wall Street opens lower
Wall Street has started in a cheerless mood, with the automobile sector leading the reverse on the back of the President's tariff order.
The S&P 500, Dow Jones and Nasdaq Composite all dropped between 0.5% and 0.7% in early trades, but by the first half-hour of trading the losses had been pared to between 0.1% and 0.2%.
General Motors was the biggest faller on the S&P, down 8%, while Tesla was up 1.3%.
Auto parts maker Aptiv, and semiconductor companies were among others leading declines, including Texas Instruments, while Advanced Micro Devices led the falls on the Nasdaq 100.
Nvidia was down over 1%.
8.10am: Stocks mixed future predicted
US stock futures were mixed ahead of Thursday's opening bell as markets continue to react to Donald Trump's auto tariffs announcement.
Dow Jones futures were slightly positive, up 0.1%, while for the S&P 500 and Nasdaq 100 were down 0.1% and 0.25%.
Wall Street stocks had finished the previous session in the red as President Trump's confirmation of the tariffs was flagged in newswire reports.
The Nasdaq led the declines, falling 2%, weighed down by declines of more than 5% in both Tesla and Nvidia, while the S&P 500 fell 1.1% and the Dow Jones was down 0.3%.
After yesterday's close, President Trump signed an executive order imposing 25% tariffs on all foreign-made cars, light trucks, and specific auto parts, set to take effect on April 2.
Auto shares were mixed in premarket trading, with General Motors Company (NYSE:GM) down 6% to add to a 3% fall the day before, while Ford Motor Company (NYSE:F) was up 0.6% and Tesla Inc (NASDAQ:TSLA) 0.7% higher.
The White House estimates the new duties could generate $100 billion annually. Trump called the move a step toward "Liberation Day" for the US economy, arguing it would promote domestic growth.
While the tariffs primarily target non-US automakers, domestic giants are seen as facing some effect from vehicles manufactured abroad and supply chain costs.
The executive order covers a broad range of components such as engines, transmissions, and electrical parts, expanding beyond finished vehicles to affect global production networks.
Around 8.0 million cars are imported into the US per year, plus a countless number of car parts and components, which equates to roughly $240 billion in trade.
In Europe, Germany's Mercedes-Benz fell 3.5%, Porsche 3.4%, BMW 2.8% and Volkswagen 2.2%, while elsewhere Fiat and Chrysler owner Stellantis was down 4.2%. Shares in tyre manufacturers were also lower, including Continental and Pirelli.
Japanese automobile manufacturers also fell sharply on Thursday, including Mazda and Subaru.
While Trump has said that there will be no exemptions this time around, market analyst Kathleen Brooks at XTB said "who knows if the President will do what he says" and that it "takes a long time to dismantle a supply chain and move lock-stock to the US for production".
Jennifer McKeown, chief global economist at Capital Economics, said: "There is scope for US auto production to rise, but not by anywhere near enough to replace its imports in the near term. And the inflationary effects of the tariffs threaten to offset any positives for the US economy."