Overnight – Trump continues to dent investor sentiment as Automakers hit by tariffs
Stocks fell again overnight as sentiment was hurt by the Trump administration’s announcement to impose tariffs on automobile imports just ahead of key inflation data.
Sentiment has been hit by U.S. President Donald Trump announcing he will impose 25% tariffs on all foreign-made cars and light trucks, effective April 2. The move is expected to ramp up local automobile costs in the near-term, as manufacturers race to find new supply chains and shift more of their production into the U.S.
But the 25% tariff also heralds pain for U.S. automakers, given that a bulk of them operate factories outside the U.S., especially in Mexico. General Motors, Stellantis and Ford all traded lower, while U.S.-listed foreign automakers Toyota Honda and Ferrari also fell.
Trump’s auto tariff threat sparked renewed concerns over the economic impact of his tariff agenda, especially as he gears up to impose tariffs on several major U.S. trading partners, also on April 2, a date he has dubbed “liberation day”.
Worries that the trade duties will dent U.S. growth and potentially reignite inflation have weighed on U.S. equities in the first quarter of 2025. Data released earlier Thursday showed that U.S. economic growth slowed in the fourth quarter, according to a final revision of government data that followed two earlier estimates. Gross domestic product increased at an annualized rate of 2.4% during the period, compared to a rise of 3.1% in the July-September quarter, figures from the Commerce Department’s Bureau of Economic Analysis showed. Economists had predicted that the number would remain unrevised at a prior estimate of 2.3%.
Company Specific
- Athleisure wear company, Lululemon Athletica quarterly report came in after the closing bell, with the company beating expectations but downgrading their outlook, seeing the stock fall 10%
- Robinhood Markets fell 1% after rolling out weather management and private banking services.
- Advanced Micro Devices fell 3% after Jefferies’ downgrade to hold from buy, citing competition concerns.
ASX SPI 8015 (-0.01%)
We are in for a quiet finish to the week with the election likely to be announced and Trumps “Freedom day” tariff announcement on April 2nd unlikely to inspire investors to be buying the dip
