• The latest GDP numbers were slightly ahead of estimates, while initial jobless claims were little changed.
• US stock futures remained largely unchanged Thursday morning as investors processed President Trump’s tariff developments.
• Trump announced a 25% tariff on “all cars not made in the US,” rattling auto stocks. General Motors, Stellantis, Ford, Toyota, Honda, and Ferrari shares traded sharply lower in premarket.
• Wall Street closed lower Wednesday, driven by a tech stock sell-off.
• China’s consumer spending showed recovery signs, but industrial profits declined.
• British retail giant Next reported strong annual profits and raised its outlook. H&M’s first-quarter sales were weaker than expected.
• European stocks fell sharply due to the auto tariffs. Asian markets traded mixed, with auto stocks declining.
• U.S. Treasury yields edged up.
• Gold prices surged due to increased trade tensions. Oil prices retreated despite a decline in U.S. crude inventories. Bitcoin traded relatively flat.
• Tariff uncertainties have led to increased market volatility and investor caution. Concerns surrounding consumer confidence exist. Analysts predict defensive sectors outperforming. The new tariffs could heavily impact automakers’ profits.

The latest GDP numbers were slightly ahead of the estimates, while initial jobless claims were little changed. US stock futures remained largely unchanged on Thursday morning as investors processed the latest tariff-related developments from President Donald Trump. In his latest escalation of the global trade conflict, Trump announced a 25% tariff on “all cars not made in the US” — a move that rattled auto stocks. The new duties, which would be in addition to any existing tariffs, weighed heavily on shares of both US and foreign automakers.

In premarket trading, General Motors (NYSE: GM), Stellantis (NYSE: STLA), and Ford (NYSE: F) all traded sharply lower. US-listed foreign automakers, including Toyota (NYSE: TM), Honda (NYSE: HMC), and Ferrari (NYSE: RACE), also posted declines.

US Market Previous Day:

Wall Street closed lower on Wednesday, driven by a sell-off in technology stocks. The Nasdaq Composite fell 2.04%, with major tech names like Meta Platforms, Amazon, and Alphabet posting losses of 2%-5%. Nvidia, the AI-chip giant, dropped nearly 6%, contributing to the broader tech weakness. The S&P 500 lost 1.12%, while the Dow Jones Industrial Average slipped 132.71 points or 0.31% (Source: TradingView.com).

(Source: TradingView.com)

Tech stocks were hit particularly hard, as investors grew increasingly concerned about oversupply in AI data centers and computing capacity. Stocks extended their losses late in the session after the White House confirmed that Trump would announce new auto import tariffs during a 4 p.m. ET press conference. Auto stocks tumbled in response, with General Motors and Stellantis each shedding more than 3%.

US Futures Remain Flat:

• Dow Jones Industrial Average futures remained flat with rise of 0.09%
• S&P 500 futures showed meagre losses of 0.09%
• Nasdaq Composite futures lead the pack with losses of 0.18%.

Key Economic Data/News:

The latest economic data reveals that the U.S. Gross Domestic Product (GDP) growth rate has decelerated. The actual GDP growth rate for the fourth quarter of 2024 came in at 2.4%, slightly above the forecasted 2.3%, but notably lower than the previous quarter’s 3.1% expansion. Despite the slowdown, the revised Q4 figure reflects modest resilience, supported by strong consumer and government spending. Corporate profits showed a solid rebound, rising by $204.7 billion during the quarter, while real Gross Domestic Income (GDI) surged by 4.5%, highlighting underlying economic strength. For the full year of 2024, GDP grew by 2.8%, driven by moderate inflation and robust income gains.

Initial jobless claims saw little change last week, indicating that employers remain hesitant to lay off workers, according to data released by the U.S. Labor Department on Thursday. For the week ending March 22, unemployment insurance filings totaled 224,000, a slight decrease of 1,000 from the previous week and in line with the Dow Jones estimate of 226,000. On a four-week rolling average, which smooths out weekly volatility, claims edged down to 224,000, marking a decline of 4,750 from the prior period. Continuing claims, which reflect the number of people receiving benefits and are reported with a one-week lag, also dipped. They fell by 25,000 to 1.856 million, suggesting that fewer individuals are staying on unemployment benefits, signaling relative stability in the labor market.

US President Donald Trump announced on Wednesday that he would impose 25% tariffs on “all cars that are not made in the United States,” while stating that there would be “absolutely no tariffs” on vehicles built domestically. White House aide Will Scharf clarified that the new tariffs will apply to “foreign-made cars and light trucks.” Additionally, the tariffs will extend to car parts such as engines, transmissions, and electrical components — many of which are imported and used in US car production. However, the tariffs on parts will not take effect until May.

Germany’s economy minister and the country’s auto industry strongly criticized Trump’s sweeping tariffs, calling the move a “fatal signal” for free and rules-based trade. The European Union is expected to push back against the measures, raising the prospect of escalating trade tensions between the US and Europe.

In a separate tariff-related development, Trump stated that the upcoming duties will likely be more “lenient than reciprocal,” ahead of the April 2 deadline when several new tariffs are set to take effect. The White House later clarified that the administration will no longer consider non-tariff barriers — such as value-added tax imposed by other countries — when calculating reciprocal tariff rates. Trump emphasized that his retaliatory tariffs will be permanent throughout his entire second term.

Trump also threatened to impose “far larger” tariffs on the European Union (EU) and Canada if they collaborate in efforts to counter US trade policies.

Meanwhile, in China, corporate earnings reports show some signs of recovery in consumer spending, although it has not fully returned to pre-pandemic levels. E-commerce giants Alibaba and JD.com both reported faster year-on-year revenue growth in their China retail segments during the last quarter of 2024 compared to the previous year, indicating gradual improvement.

However, China’s industrial profits slipped in the early months of 2025, reflecting continued deflationary pressures and rising global trade tensions. Official data released on Thursday revealed that profits at major industrial firms fell 0.3% in the first two months of the year. This marks a slowdown after three consecutive years of sharp declines, with some stabilization attributed to improved profitability in the manufacturing and raw material sectors.

Earnings Season/Company News:

British retail giant Next reported on Thursday that it surpassed £1 billion in annual profit for the first time, while also raising its sales and profit guidance for 2025. The company posted a pretax profit of £1.011 billion ($1.3 billion) for 2024, marking a 10.1% increase from the previous year and surpassing the billion-pound milestone. Total group sales climbed 8.2% to £6.3 billion. Next attributed its strong performance to its role as a “comprehensive service provider for other retailers,” highlighting that 42% of its online sales now come from non-Next branded products. The company raised its sales guidance for the first half of 2025 to 6.5%, up from a prior forecast of 3.5%, resulting in an upgraded full-year price sales growth projection of 5%.

Meanwhile, Swedish fashion giant H&M reported weaker-than-expected first-quarter sales, signaling a sluggish start to the year for the world’s second-largest clothing retailer. Sales in local currencies increased by 2% to 55.33 billion Swedish krona ($5.5 billion) during the three-month period, falling slightly short of the 55.86 billion forecast by LSEG analysts. The company’s operating profit for the quarter came in at 1.2 billion krona, missing expectations of 1.9 billion.

On the earnings front, investors are closely watching athleisure wear company Lululemon Athletica (NASDAQ:LULU), which is set to report its quarterly results after the closing bell. Markets are expected to scrutinize any commentary from Lululemon executives regarding the broader outlook for discretionary spending. Recent data indicates that shoppers are becoming more cautious, partly due to growing economic uncertainty linked to the potential impact of Trump’s tariffs.

Global Market Trends:

European stocks fell sharply on Thursday as global markets reacted to the new automotive tariffs announced by U.S. President Donald Trump. The pan-European Stoxx 600 index dropped nearly 0.65%, with the Stoxx Europe autos index shedding 2.2%. Shares of Stellantis, the maker of Jeep, slid 4.5%, while Mercedes-Benz fell 3.6% and Germany’s BMW declined 2.5%. However, retail stocks led the Stoxx 600 in morning trading, driven by strong earnings from British retailers Next and Ocado, signaling a potential shift in consumer sentiment. Next was the top performer on the index, rising 6% after reporting its first-ever annual profit above £1 billion ($1.3 billion). German online retailer Zalando gained 4.3%, while Marks & Spencer rose 3.2%.

Asia-Pacific markets traded mixed on Thursday, mirroring Wall Street’s losses as investors weighed the impact of Trump’s 25% tariffs on auto imports. Japan’s Nikkei 225 ended the day 0.6% lower at 37,799.97, while the broader Topix index was flat at 2,815.47. In South Korea, the Kospi index dropped 1.39% to 2,607.15, and the small-cap Kosdaq fell 1.25% to 707.49. Meanwhile, mainland China’s CSI 300 edged up 0.33% to close at 3,932.42, and Hong Kong’s Hang Seng Index gained 0.41%, finishing at 23,578.80. Australia’s S&P/ASX 200 closed 0.38% lower at 7,969.

Shares of Asian automakers took a hit after Trump’s tariff announcement. Japanese carmakers Toyota and Honda fell 2.04% and 2.48%, respectively. Nissan, which operates three plants in Mexico, slipped 1.68%, while Mazda Motor lost 6%. Mitsubishi Motors declined 3.2%. In South Korea, Kia Motors, which also has a plant in Mexico, dropped 3.45%.

Debt Market:

(Source: TradingView.com)

On Thursday, U.S. Treasury yields edged up as investors considered new tariffs on foreign automakers and evaluated the overall condition of the U.S. economy. The yield on the benchmark 10-year Treasury note increased by over 5 basis points to 4.391%, while the 2-year Treasury yield climbed nearly 2 basis points to 4.025%.

Commodities and Other Assets:

Gold prices surged on Thursday, approaching last week’s record high, following U.S. President Donald Trump’s announcement of new tariffs on auto imports starting next week. The move intensified global trade tensions, boosting demand for safe-haven assets like gold. Bank of America predicted that gold could reach $3,500 per ounce within the next two years, driven by central banks and China’s insurance industry increasing their holdings. The precious metal has already gained more than 15% this year, breaking above $3,000 per ounce for the first time as geopolitical instability and Trump’s trade policies push investors toward safer assets.

Oil prices retreated from a one-month high on Thursday, despite government data confirming a sharp decline in U.S. crude inventories, which signaled strong fuel demand in the world’s largest economy. Both major benchmarks climbed roughly 1% on Wednesday after the Energy Information Administration reported a 3.3 million-barrel drop in U.S. crude stockpiles last week, far exceeding analysts’ forecasts of a 956,000-barrel decline. However, sentiment weakened following Trump’s auto tariffs announcement, as traders evaluated the potential impact on global economic activity and oil demand.

(Source: TradingView.com)

Bitcoin traded relatively flat on Thursday amid the broader market downturn triggered by Trump’s tariff plans. The cryptocurrency dipped below $86,000 on Wednesday but recovered slightly, adding over $1,000 in value. However, most altcoins edged lower alongside Bitcoin, as investors remained cautious while awaiting further clarity on the U.S. trade tariffs.

Market Sentiment:

While the potential easing of tariffs could temporarily soothe investor anxiety, it may actually increase uncertainty due to the unpredictable “on again, off again” nature of these announcements. This inconsistency leaves business leaders unable to make long-term plans and undermines investor confidence in the stability of U.S. trade policy. Trump’s latest round of tariff announcements comes at a time when investors are already on edge about the broader impact on the U.S. economy, which is showing signs of strain. Consumer confidence hit a 12-year low in March, according to a Conference Board report, highlighting growing pessimism. This drop follows a similarly weak reading from the University of Michigan’s March Survey of Consumers, indicating broader concerns about the economic outlook.

Analysts expect that in light of Trump’s plan to introduce additional tariffs on auto imports, defensive sectors such as consumer staples and utilities will continue to outperform. This rotation toward safer sectors is likely to persist at least until April 2, when the reciprocal tariffs take effect, and potentially longer if Trump continues to tweak the measures.

Bernstein estimates that the tariffs will deliver a significant blow to gross profit, particularly for import-heavy automakers and parts suppliers. The firm forecasts an unmitigated sector-wide impact of roughly $110 billion, or around $6,700 per vehicle. Ford and General Motors could see their EBIT (earnings before interest and taxes) plunge by up to 30% in 2025, even after factoring in some price pass-through and sourcing adjustments. Stellantis is expected to fare better due to its higher U.S. content in vehicles produced in Mexico. Meanwhile, Tesla is projected to be the biggest beneficiary of the tariffs, as its domestic production gives it a significant advantage over foreign competitors.