Correction: US Equity Indexes Fall as Investors Assess Impact of Trump's Auto Tariffs

02:11 PM EDT, 03/27/2025 (MT Newswires) -- (Corrects effective date of auto tariffs to April 3 in the third paragraph.)

US equity indexes declined while most government bond yields rose as investors weighed the impact of President Donald Trump's auto tariffs and Q4 economic growth unexpectedly turned out to be faster than anticipated.

The Nasdaq Composite fell 0.2% to 17,861.9, with the S&P 500 down 0.2% to 5,702.3 and the Dow Jones Industrial Average 0.3% lower at 42,330.2 after midday on Thursday. All sectors except consumer discretionary, home to Tesla (TSLA), and consumer staples, fell intraday.

Late on Wednesday, Trump unveiled a permanent 25% tariff on all imports of cars and light trucks into the US, effective April 3. Canadian Prime Minister Mark Carney plans to convene a cabinet meeting on Thursday, according to a Scotiabank note.

Carney said the US auto tariffs are a "direct attack" on Canada and auto sector employees, and Canada-US ties are "in the process of being broken." Responding to a question whether Canada would retaliate, Carney said "Yes, it will happen soon." He added: "We have options. We can introduce retaliatory tariffs."

"Not surprisingly, the tariff talk is resulting in another round of risk-off, for stocks but also for FX, as traders try to ascertain the implications, but generally conclude that tariffs will be both growth-restraining and inflation-producing," Thierry Wizman, global foreign-exchange and rates strategist at Macquarie, said in a note. "And certainly, that will be the conclusion from the [Federal Reserve] too."

The ICE US Dollar Index fell 0.3% to 104.29.

Most US Treasury yields rose intraday, with the 10-year yield up 3.5 basis points to 4.37%.

Gold futures jumped 1.3% to $3,093.00; its silver counterpart surged 2.6% to $35.10.

Meanwhile, Tesla will be the automaker least impacted by US President Donald Trump's 25% tariffs on car imports, while General Motors ( GM ) and German carmakers will be impacted most negatively, RBC Capital Markets said in a note. While Ford (F) and Stellantis ( STLA ) may be negatively hit, "Tesla could benefit meanwhile, given domestic production and competition from imports into the US."

Tesla shares rose 2.9%, among the top performers on the S&P 500 and the Nasdaq. General Motors ( GM ) shares slumped 6.3%, the steepest decline on the S&P 500.

In economic news, US gross domestic product growth was revised up to 2.4% for Q4 from a 2.3% increase in the previous estimate, compared with expectations for no revision in a Bloomberg-compiled survey. GDP grew 3.1% in Q3.

The seasonally adjusted number of initial claims decreased to 224,000 in the week that ended March 22 from the previous week's upwardly revised 225,000 print, which was the consensus in a survey of analysts compiled by Bloomberg. This week's report reflects the annual revision to seasonal adjustment factors.

Pending home sales rose by 2% in February, above the 1% increase expected in a survey compiled by Bloomberg and following a 4.6% decrease in January, according to the National Association of Realtors. The monthly sales index was down 3.6% from February 2024.

West Texas Intermediate crude oil futures rose less than 0.1% to $69.69 a barrel.

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