U.S. stocks ended lower for the second straight session on Thursday, weighed down by President Donald Trump’s fresh tariff announcement on foreign-made cars, while investors awaited the release of the personal consumption expenditure (PCE) reading on Friday. All three major indexes ended in negative territory.
How Did The Benchmarks Perform?
The Dow Jones Industrial Average (DJI) fell 0.4% or 155.09 points, to end at 42,229.70 points.
The S&P 500 declined 0.3% or 18.99 points, to close at 5,693.31 points. Tech and industrial stocks were the worst performers. However, consumer staples stocks gained on Thursday.
The Technology Select Sector SPDR (XLK) lost 0.9%. The Industrial Select Sector SPDR (XLI) fell 0.5%. The Consumer Staples Select Sector SPDR (XLP) added 1.1%. Eight of the 11 sectors of the benchmark index ended in negative territory.
The tech-heavy Nasdaq slid 0.5% or 94.98 points to finish at 17,804.03 points.
The fear-gauge CBOE Volatility Index (VIX) was up 1.96% to 18.69. A total of 14.7 billion shares were traded on Thursday, lower than the last 20-session average of 16.3 billion.
Trump’s Tariffs on Foreign-Made Cars Weigh on Markets
Stocks tumbled on Thursday, led by major automakers, after Trump announced hefty tariffs targeting foreign carmakers.
Trump unveiled his plan on Wednesday evening to impose 25% tariffs on all imported cars and light trucks, which go into effect on April 3. Besides, he announced 25% tariffs on foreign-made auto parts effective May 3.
Investors are expecting more reciprocal tariffs to be announced by Trump in the coming days. However, the President also said that there would be flexibility on these tariffs.
Shares of major automakers declined following Trump’s announcement. Shares of General Motors Company (GM) ended 7.4% lower, while Ford Motor Company (F) declined 3.9%. General Motors carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
However, shares of Tesla, Inc. (TSLA) gained 0.4%. Tesla is expected to benefit from Trump’s tariffs owing to its large-scale domestic production.
Trump had earlier said that he would be slapping reciprocal tariffs on all countries that have tariffs on U.S. imports. On Wednesday, he confirmed that the reciprocal tariffs will be permanent for the rest of his second term in the White House.
Investors are also waiting for the February PCE reading, the Federal Reserve’s preferred inflation gauge, which will give them a clearer picture of the economy’s health.
Economic Data
The U.S. expanded at a healthy pace in the fourth quarter of 2024, but slower than the previous quarter. U.S. GDP grew 2.4% in fourth-quarter 2024, according to the final estimate for the period. GDP grew 3.1% in the third quarter.
The Labor Department reported that jobless claims totaled 224,000 for the week ending March 22, decreasing 1,000 from the previous week’s revised level of 225,00. The four-week moving average was 224,000, a decrease of 4,750 from the previous week’s revised average of 228,750.
Continuing claims came in at 1,856,000, a decrease of 25,000 from the previous week’s revised level of 1,881,000. The 4-week moving average was 1,870,000 an increase of 2,750 from the previous week's revised average of 1,867,750.
In other economic data, the National Association of Realtors (NAR) said U.S. pending home sales index rose 2% to 72 in February. However, pending home sales decreased 3.6% year over year in February.
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Ford Motor Company (F): Free Stock Analysis Report General Motors Company (GM): Free Stock Analysis Report Tesla, Inc. (TSLA): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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