Stock futures changed a little on Thursday morning as investors weighed the latest tariff-related news from President Donald Trump, including his new tariffs aimed at foreign automakers. Futures tied to major benchmarks hovered just above flat. The Dow Jones Industrial Average gained approximately 8 points, the S&P 500 shed nearly 0.2%, and the Nasdaq Composite dropped about 0.3%.
Trump has long discussed imposing duties on countries that have their own tariffs on U.S. imports.
#OnETNOW | Will Trump’s auto tariffs crash Indian markets and hit Tata Motors hard? @ChakriLokapriya shares his insights!
Watch the full interview here:https://t.co/OSN1usxhIt@nikunjdalmia | @_sherylld pic.twitter.com/fl0XIkOqQF
— ET NOW (@ETNOWlive) March 27, 2025
On Wednesday evening, he announced that new tariffs on “all cars that are not made in the United States” will go into effect on April 2. This has caused shares of major automakers to pull back in premarket trading, with Ford Motor Company dropping 6.5%, General Motors shedding 1.8%, and Tesla slipping about 0.5%.
Despite the anxiety over the tariffs, Trump’s comments hinted at some relief for investors. He mentioned that the tariffs would be “very lenient” and that he would be open to facilitating a deal with ByteDance’s TikTok. However, he also threatened to impose “far larger” tariffs on the European Union and Canada if they work together to combat trade tariffs.
#MarketAlert | Tata Motors down over 5% as Trump announces 25% tariff on imported cars #TataMotors #TrumpTariffs #StockMarket pic.twitter.com/Ks6TUnjIWE
— ET NOW (@ETNOWlive) March 27, 2025
These announcements come as investors are already worried about how retaliatory tariffs will impact the U.S. economy, which is showing signs of weakness. According to a Conference Board report, consumer confidence reached a 12-year low in March, reflecting broader pessimism toward the economy. Daniel Skelly, Head of Morgan Stanley’s Wealth Management market research and strategy team, highlighted the volatility in the market, stating, “Despite the recent rebound in stocks, volatility remains as policy uncertainty lingers.
Next week’s tariff deadline will likely be more of a starting point for negotiations than a conclusion, so the market may struggle to recover in a straight line higher.
Donald Trump considers two-step tariff regime on April 2 via @FT
https://t.co/3PQnmMIGK8— Gregory Daco (@GregDaco) March 25, 2025
Major indexes have seen some gains this week, with the S&P 500 ticking up roughly 1% and the Dow Jones Industrial Average gaining 1.1%. Investors are also awaiting fresh jobless claims data on Thursday and the March reading of the personal consumption expenditures (PCE) price index, which is the Federal Reserve’s preferred gauge of inflation.
In economic news, the U.S. economy grew a little faster than expected in the final three months of 2024.
Trump’s new tariffs impact stocks
The Bureau of Economic Analysis (BEA) reported a 2.4% growth rate for the fourth quarter, up from the previous estimate of 2.2%.
This was driven by increased consumer spending, which grew at a 4% rate. The BEA also noted that core inflation was softer than previously indicated. Excluding food and energy prices, the personal consumption expenditures price index, the Federal Reserve’s primary inflation gauge, increased by 2.6%, down 0.1 percentage points from the prior estimate.
On the employment front, initial filings for unemployment insurance totaled 224,000 for the week ending March 22, down 1,000 from the prior week and close to the Dow Jones estimate of 226,000. Continuing claims also decreased, falling to 1.856 million. In other news, Trump said he might cut tariffs on China to help facilitate a deal for ByteDance to sell its U.S. operations of TikTok.
The President said he wants the U.S. to have a 50% ownership position in TikTok via a joint venture. In premarket moves, shares of automakers reacted to Trump’s tariff announcements. Ford Motor Company dropped more than 6%, while General Motors and Tesla shed more than 1%.
Meanwhile, U.S.-listed Chinese technology firm Alibaba shares added around 1% after announcing a new open-source artificial intelligence model. In stock upgrades, RBC Capital Markets upgraded shares of Northrop Grumman to “outperform” from “sector perform,” citing positive sentiment and an improving revenue outlook. Analyst Ken Herbert mentioned that Northrop Grumman is the likely choice for the Department of Defense’s Navy F/A-XX Stealth Fighter program, anticipated to be a positive catalyst for the stock.
Shares of Northrop Grumman are up 8% year to date. In the Asia-Pacific markets, stocks traded mixed after declines on Wall Street due to fears over Trump’s new auto tariffs. Japan’s Nikkei 225 ended the day 0.6% lower, while the broader Topix index remained flat.
Image Credits: Photo by Arvid Skywalker on Unsplash
