NEW YORK, New York - Shares in automakers fell sharply Thursday after U.S.President Donald Trump imposed a 25 percent tariff on all cars manufactured outside the United States, and vowed the tariffs would remain in place throughout his second term.
The announcement of the 25 percent tariff on imported automobiles led to significant volatility in the auto sector. Traditional automakers such as General Motors and Ford experienced notable declines, while electric vehicle manufacturers like Tesla and Rivian saw modest gains.
Technology stocks also faced pressure, with companies like Nvidia and AMD registering losses amid broader market concerns.
Conversely, gold mining companies benefited from the market uncertainty, as investors sought safe-haven assets, driving gold prices to new highs.
Economic Indicators:
In economic news, reports indicated fewer unemployment benefit applications and slightly stronger economic growth in the last quarter of the previous year, providing some support to the market.
Investors and traders are closely monitoring developments related to the auto tariffs and their potential impact on global trade dynamics, as markets remain sensitive to policy changes and economic indicators.
"I think it's just the almost scattershot way that trade policies being implemented that maybe has investors on edge ... just the approach DOGE has taken worries folks that something may fall through the cracks. It's not so much the policy, it's the way they're going about it," Sameer Samana, Wells Fargo Investment Institute senior global market strategist. told CNBC Thursday
"If in the next couple weeks we have a trade and tariff framework in place, and companies and consumers can start to make decisions again with some clarity, it's possible that this was all a near-term speed bump and we start to get kind of back on track," he said.
At the close on Thursday all the major U.S. stock indices were in the red. Following are Thursday's closing quotes:
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S&P 500 (^GSPC): The broad-market index declined by 18.89 points, or 0.33 percent, ending the session at 5,693.31.
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Dow Jones Industrial Average (^DJI): The blue-chip index fell by 155.09 points, or 0.37 percent, closing at 42,299.70.
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NASDAQ Composite (^IXIC): The tech-heavy index decreased by 94.98 points, or 0.53 percent, to finish at 17,804.03.
Global Currency Markets React to New U.S. Auto Tariffs
The foreign exchange markets experienced notable movements on Thursday following the United States' announcement of a 25 percent tariff on imported automobiles, a decision that has intensified global trade tensions.
Key Currency Movements:
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EUR/USD (Euro/US Dollar): The euro strengthened by 0.40 percent against the U.S. dollar, settling at 1.0796. This uptick comes despite concerns over the eurozone's exposure to the new U.S. auto tariffs.
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USD/JPY (US Dollar/Japanese Yen): The U.S. dollar appreciated by 0.34 percent against the Japanese yen, jumping to 151.06. The yen's depreciation reflects market apprehension regarding Japan's automotive exports to the U.S.
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USD/CAD (US Dollar/Canadian Dollar): The U.S. dollar advanced by 0.31 percent against the Canadian dollar, reaching 1.4309. Canada's significant auto industry faces potential challenges due to the imposed tariffs.
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GBP/USD (British Pound/US Dollar): The British pound rose by 0.50 percent against the U.S. dollar, last trading at 1.2951. The pound's strength is attributed to a recent positive budget assessment and easing inflation in the UK.
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USD/CHF (US Dollar/Swiss Franc): The U.S. dollar declined by 0.21 percent against the Swiss franc, settling at 0.8817, indicating a shift towards safe-haven currencies amid escalating trade disputes.
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AUD/USD (Australian Dollar/US Dollar): The Australian dollar saw a modest increase of 0.07 percent against the U.S. dollar, edging up to 0.6301, as investors weighed the broader implications of the U.S. trade policy.
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NZD/USD (New Zealand Dollar/US Dollar): The New Zealand dollar firmed by 0.16 percent against the U.S. dollar, rising to 0.5736, reflecting cautious optimism in the market.
The U.S. administration's decision to implement these tariffs has heightened fears of a full-scale trade war, leading to increased volatility in the currency markets. Investors are closely monitoring developments, particularly potential retaliatory measures from affected countries, which could further influence currency valuations in the coming days.
Global Stock Markets Experience Mixed Results Amid Auto Tariff Announcements
Stock markets around the world displayed varied performances on Thursday as investors reacted to the United States' implementation of 25 percent tariffs on automotive imports. The move led to declines in several major indices, particularly in Europe and Asia, while some markets managed modest gains.
Canadian Markets:
S&P/TSX Composite Index (^GSPTSE): Canada's main stock index remained unchanged, closing at 25,161.06.
European Markets:
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FTSE 100 (UK): Closed at 8,666.12, down 23.47 points, a decrease of 0.27 percent.
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DAX (Germany): Ended at 22,678.74, falling 160.29 points, or 0.70 percent.
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CAC 40 (France): Settled at 7,990.11, a drop of 40.57 points, equating to 0.51 percent.
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EURO STOXX 50: Concluded at 5,381.08, declining by 30.61 points, or 0.57 percent.
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Euronext 100 Index: Finished at 1,590.00, down 6.03 points, a reduction of 0.38 percent.
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BEL 20 (Belgium): Slightly increased to 4,434.62, gaining 0.47 points, an uptick of 0.01 percent.
Asian, Oceania, Middle East and African Markets:
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Hang Seng Index (Hong Kong): Rose to 23,578.80, up 95.48 points, marking a 0.41 percent increase.
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STI Index (Singapore): Advanced to 3,981.57, gaining 17.86 points, or 0.45 percent.
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S&P/ASX 200 (Australia): Declined to 7,969.00, down 30.00 points, a decrease of 0.38 percent.
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ALL ORDINARIES (Australia): Dropped to 8,185.50, losing 39.60 points, or 0.48 percent.
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S&P BSE SENSEX (India): Climbed to 77,606.43, up 317.93 points, reflecting a 0.41 percent gain.
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IDX Composite (Indonesia): Increased to 6,510.62, adding 38.26 points, or 0.59 percent.
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FTSE Bursa Malaysia KLCI: Surged to 1,535.73, up 17.68 points, a rise of 1.16 percent.
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S&P/NZX 50 Index Gross (New Zealand): Fell to 12,305.79, down 28.39 points, a 0.23 percent decrease.
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KOSPI Composite Index (South Korea): Dropped to 2,607.15, losing 36.79 points, or 1.39 percent.
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TWSE Capitalization Weighted Stock Index (Taiwan): Declined to 21,951.76, down 308.53 points, a 1.39 percent fall.
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TA-125 (Israel): Rose to 2,490.17, gaining 26.75 points, or 1.09 percent.
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EGX 30 Price Return Index (Egypt): Increased to 32,026.10, up 281.80 points, marking a 0.89 percent gain.
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Top 40 USD Net TRI Index (South Africa): Slightly up at 4,862.24, adding 4.18 points, or 0.09 percent.
Currency Indices:
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Photo credit: Big News Network news agency
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