Global Markets Remain Turbulent After US Tariff Announcement on Imported Cars

Intense fluctuations in stocks were observed across Wall Street indices today (27.3.25) as the US moved forward with imposing tariffs on imported cars, intensifying concerns about the economic impacts of a potential trade war. This comes despite data showing faster-than-expected growth in the world’s largest economy. With just days left in what will be the worst quarter for the S&P 500 since 2023, the index fluctuated between gains and losses, according to Bloomberg. Automakers from Toyota Motor to Stellantis, Mercedes-Benz Group, and General Motors suffered significant blows. Meanwhile, most large-capitalization companies saw an uptick, led by Tesla and Amazon. The bond market also reflected concerns over the impact of US tariffs on inflation, with short-term government bonds outperforming long-term ones. The American economy expanded at a quicker pace in the fourth quarter of 2024 than previously estimated, amid strong corporate profit growth. Separate data showed an increase in pending home sales and a resilient labor market. According to Bret Kenwell of eToro, these figures won’t significantly boost investor confidence as their focus remains on the current economic landscape rather than past conditions. ‘Investors will want to see results on inflation levels or a strong employment number to gain some confirmation of the current economic environment,’ Kenwell stated. Both the S&P 500 and Nasdaq 100 showed minimal changes, while the Dow Jones Industrial Average dropped by 0.1%. Advanced Micro Devices fell due to an analyst downgrade. GameStop is seeking to sell $1.3 billion in convertible bonds to fund Bitcoin purchases. CoreWeave reportedly plans to reduce its public listing size to approximately $1.5 billion. The yield on 10-year Treasury notes rose by two basis points to 4.37%. The dollar slipped by 0.1%, with Mexico’s peso and Canada’s loonie leading losses among major currencies. Despite recent strong data, economists, consumers, and businesses grow increasingly cautious about the implications of a trade war. Trump signed a proclamation applying a 25% tariff on car imports and warned of harsher penalties against the EU and Canada if they unite against the US. Chris Larkin from E*Trade at Morgan Stanley noted, ‘For markets, the question is whether anything can overcome the noise of the tariff story.’ In the short term, the most likely scenario is more volatile trading. Individual investor pessimism regarding stock market prospects decreased in the latest survey by the American Association of Individual Investors, with optimism and neutrality increasing. Analysts at Bespoke noted that although bearish sentiment declined, it remained above 50%—higher than 96.8% of all prior weekly readings since 1987.