Shares of automakers in Japan, Europe and South Korea who rely on the US as a major export market also took a beating. (AFP pic)
NEW YORK: Futures tracking Wall Street’s main indexes were subdued today, with auto stocks taking a hit after President Donald Trump’s latest tariff salvo.
In a late-night announcement yesterday, Trump unveiled his plan to implement 25% tariffs on imported cars and light trucks effective next week, while those on auto parts are expected to begin from May 3.
Automakers who have vast supply chains across North America declined in premarket trading.
General Motors slid 6.8% and Ford fell 2.8%, while car-parts makers Aptiv and Borgwarner dropped about 1.2% each.
Tesla was flat in volatile trading after a 5.6% drop in the previous session.
Shares of automakers in Japan, Europe and South Korea who rely on the US as a major export market also took a beating.
Trump’s wavering trade policies have spewed uncertainty among investors on worries that they could not only upend supply chains and stifle investment, but in the process also fan inflation pressures and hurt global growth.
The president has also vowed to impose reciprocal tariffs on trade partners in early April, although he has hinted that the polices could be flexible.
Still, “the big concern is that not only will these tariffs be disruptive and economically harmful, but it indicates that the Trump administration’s shake-up of global trade won’t necessarily end with next week’s April 2 announcement of reciprocal tariffs, as previously hoped,” Kyle Rodda, senior financial market analyst at Capital.com said.
At 6.57am, Dow E-minis were up 41 points, or 0.10%, S&P 500 E-minis were down 4.5 points, or 0.08% and Nasdaq 100 E-minis were down 40.25 points, or 0.20%.
Before the opening bell, investors will parse a final fourth-quarter’s gross domestic product (GDP) figure, with economists expecting a confirmation of 2.3% growth.
Simultaneously, the initial jobless claims for the week ending March 22 is also due.
However, the centerpiece of the week’s economic indicators will be the personal consumption expenditures price index – the Federal Reserve’s preferred measure of inflation – scheduled for release on Friday.
Investors have cut their holdings of US equities, which pushed both the S&P 500 and the Nasdaq down 10% from their respective record highs earlier in the month – commonly known as technical correction territory.
Both the indexes are poised to end the first quarter of 2025 in the red, with the benchmark index on track for its first quarterly decline in six, while the tech-focused index is set for its biggest quarterly drop in nearly two years.
Fed policymakers including Susan Collins and Thomas Barkin are expected to share their perspectives on the economy later in the day and are likely to reiterate the central bank’s cautious stance on monetary policy.
Among other stocks, Advanced Micro Devices lost 3.1% after brokerages Jefferies downgraded the chip stock to “hold” from “buy”.
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