Auto tariffs put markets in reverse gear

When U.S. President Donald Trump won the 2024 presidential election in November last year, markets were in a relatively buoyant mood.

Talk of deregulation and tax cuts drove consumer sentiment, while easing inflation led investors to believe multiple Fed rate cuts would come, boosting the stock market. 

Now, there seems to have been a stark reversal in expectations. Trump’s tariff announcements and, sometimes, walking back on the threats have sent markets on a rollercoaster ride. 

This comes as investors are anxious about how his retaliatory tariffs will affect the broader U.S. economy, which is already showing some signs of weakness. 

The specter of a recession looms large, like the sword of Damocles over the stock market. The question is, will the sword actually cut market returns, and if so, when?

— Lim Hui Jie

Dow sees back-to-back losses
All three major U.S. stock indexes fell on Thursday as investors weighed the latest tariff-related news from Trump, including new tariffs aimed at foreign automakers. The Dow Jones Industrial Average dropped 0.37%, while the S&P 500 declined 0.33% and the Nasdaq Composite slid 0.53%. Shares of several automakers declined after Trump announced 25% tariffs on “all cars that are not made in the United States,” which will go into effect on April 2. General Motors pulled back more than 7%, while Ford slipped nearly 4%. Over in Europe, the pan-European Stoxx 600 slipped 0.44%.

Tesla a clear winner from auto tariffs: analysts
Several analysts on Wall Street see a clear winner emerging from President Donald Trump‘s new auto tariff policy: Tesla. So far, multiple analysts see Elon Musk‘s electric vehicle giant as a relative beneficiary given its domestic production. To put it simply: “Tesla wins, Detroit bleeds,” wrote Bernstein analyst Daniel Roeska in a Thursday note to clients.

Trump threatens ‘far larger’ tariffs on EU and Canda
Trump has threatened to impose “far larger” tariffs on the European Union (EU) and Canada if they work together to combat trade tariffs. “If the European Union works with Canada in order to do economic harm to the USA, large scale Tariffs, far larger than currently planned, will be placed on them both in order to protect the best friend that each of those two countries has ever had!,” Trump said in a Truth Social update on Thursday.

Coreweave downsizes IPO
Cloud computing company CoreWeave on Thursday priced shares at $40 in the company’s IPO, raising $1.5 billion in the biggest U.S. tech offering since 2021, CNBC has confirmed. The company, which provides access to Nvidia graphics processing units for artificial intelligence training and workloads, had originally planned to sell shares for between $47 and $55 each. Earlier, a source also confirmed to CNBC that Nvidia was aiming to anchor at $40 a share with a $250 million order, according to a source.

Ubisoft creates new Tencent-backed subsidiary
Video gaming firm Ubisoft on Thursday announced it was creating a new gaming subsidiary with Chinese technology giant Tencent investing 1.16 billion euros ($1.25 billion) into the unit. The subsidiary will focus on Ubisoft’s best-known games brands, including Assassin’s Creed, Far Cry and Tom Clancy’s Rainbow Six, according to the company.

[PRO] Buying Nvidia is a ‘particularly attractive opportunity,’ 
There is an end in sight to Nvidia’s recent rough patch, and that means now could be a plump buying opportunity for shares of the artificial intelligence darling, according to Bank of America. The firm has a buy rating on the stock and a $200 target price, implying a nearly 76% upside from Wednesday’s close.

While it is “super fun seeing people love images” in ChatGPT, “our GPUs are melting,” Altman posted on social media site X on Thursday, adding that the company will temporarily limit the feature’s usage as it works to make it more efficient.

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