President Donald Trump announced a 25% tariff on imported cars and light trucks, effective April 2. The tariffs, which coincide with the implementation of reciprocal tariffs, have escalated global trade tensions. Stock futures remained stable on Thursday as investors analyzed the announcement.
Futures tied to the Dow Jones Industrial Average rose 82 points, or 0.2%, while S&P 500 futures climbed 0.1%. Shares of major auto manufacturers pulled back, with some experiencing significant premarket declines. General Motors slid another 6.5% in premarket trading on Thursday, while Ford fell 2.9%.
Tesla was little changed. The decision comes amid investor anxiety about the broader U.S. economy, which shows signs of weakness. According to a Conference Board report, consumer confidence reached a 12-year low in March, reflecting broader pessimism towards economic conditions.
“[Wednesday] was a reminder that despite the recent rebound in stocks, volatility remains as policy uncertainty lingers,” said Daniel Skelly, Head of Morgan Stanley’s Wealth Management market research and strategy team.
Trump imposes 25% car tariffs
He noted that the tariff deadline would likely mark the beginning of negotiations rather than the end, potentially causing more market instability.
Currently, stocks are holding on to marginal gains for the week. The S&P 500 has gained roughly 1%, alongside the Nasdaq Composite. The Dow has risen 1.1% this week.
On the economic front, fresh jobless claims data will be monitored on Thursday, followed by the March reading of the personal consumption expenditures price index on Friday, the Federal Reserve’s preferred inflation gauge. Asia-Pacific markets showed mixed reactions on Thursday, tracking losses on Wall Street following Trump’s auto tariff announcement. Japan’s benchmark index ended the day 0.6% lower at 37,799.97, while South Korea saw its index decline by 1.39% to 2,607.15.
“Investors will be frustrated by this announcement with few details… as this 25% number is hard to digest,” Wedbush analyst Daniel Ives said. Uncertainty around Trump’s trade policies has roiled Wall Street for weeks on concerns it could upend supply chains and hurt global growth, at 8:30 a.m. ET, the market will get a reading of the fourth quarter’s final GDP figures, with expectations set for a confirmation of a 2.3% uptick.
Simultaneously, the initial jobless claims for March 22 will be unveiled.
