Key Points
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The stock market opened red due to Trump announcing new auto tariffs.
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This overshadowed the stable GDP data for Q4.
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The market is still red due to the uncertainty post-tariffs.
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The market staged a small recovery rally last week due to tariff-related optimism as the administration hinted that tariffs would not be as severe. However, all those recovery gains have been almost undone as the stock market has started falling again, especially after Trump’s recent 25% tariff announcement on autos.
The stock market has declined despite Q4 2024 GDP data coming in slightly better than expected. It grew 2.4%, which was expected to come in at 2.3%. There’s still significant uncertainty about the GDP data since many expect it to start declining in Q1 2025. That 0.1% surprise is still welcome, but the tariff announcements have overshadowed any optimism on that front.
Here’s a market update as of 10:00 A.M (ET) today. The stock market has recovered after opening red.
- The S&P 500 is down 5.49 points, or 0.1%.
- The Nasdaq Composite is down 38.7 points, or 0.21%.
- Dow Jones Industrial Average is down 73.29 points, or 0.17%.
Macros Today
GDP growth is in focus today. The print came in healthy, but this data is for Q4 2024. Market volatility started in Q1 2025 as tariffs kicked in and major government restructuring has been taking place, so Wall Street remains tense. The Federal Reserve Bank of Atlanta expects Q1 2025 GDP to decline by 1.8%. Regardless, the most recent Q4 GDP growth figure has still added some optimism to the markets.
- Q4 GDP came in at 2.4% vs. 2.3% estimated. Previously, this number was at 2.3%.
- Jobless claims came in at 224,000 vs. 225,000 estimated. Previously this was at 223,000.
- Real consumer spending grew at 4% vs. 4.2% estimated. Previously, this was 3.7%.
Trump’s Tariff Announcement
Trump’s recent tariff announcement came after a lot of speculation that he may be backing down on tariffs due to how negatively the stock market reacted. Last week, markets were elated due to hints that reciprocal tariffs on April 2nd would not be blanket tariffs and that the administration was going to be selective. Investors were specifically happy about Trump sparing autos. Reports came in that he was unlikely to sign in tariffs on autos in April. Those reports have proved to be correct, but not in the way many would have liked.
President Donald Trump announced yesterday that he was placing 25% tariffs on auto imports to raise $100 billion in government revenue. He also said that these tariffs were “permanent.” These tariffs are going to go into effect starting April 3rd, and the average auto price on an imported vehicle could jump by around $12,500.
This mainly hurts Mexico and Canada. Both countries export the most car parts to the U.S., followed by China, which has already been tariffed significantly. Trump has also said that if Canada and the E.U. cooperate, he will be slapping even more tariffs on these countries.
In response, the market has opened red despite the positive macro data.
Other Assets
- Gold: Up 0.76% as risks increase.
- Natural Gas: Fell earlier but has almost fully recovered.
- Crude Oil: Almost unchanged.
- Bitcoin: Down 0.55%.
The image featured at the top of this post is ©gerenme / E+ via Getty Images.