US stocks drop slightly in 1st trading since Trump’s auto tariffs announced
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(NEW YORK) — U.S. stocks slid on Thursday in the first trading since President Donald Trump announced 25% auto tariffs, escalating a global trade war and prompting forecasts of higher car prices.
The Dow Jones Industrial Average fell 250 points, or 0.5%, while the S&P 500 dropped 0.5%. The tech-heavy Nasdaq declined 0.6%.
Shares of major U.S. automakers plunged in early trading. General Motors dropped more than 8%, while Ford fell nearly 3%. Stellantis — the parent company of Jeep and Chrysler — declined 4%.
Tesla, the electric carmaker led by Trump-advisor Elon Musk, bucked the trend. Shares of Tesla ticked up 1.5% in early trading on Thursday.
The 25% tariffs will be applied to imported passenger vehicles, including cars, SUVs, minivans, cargo vans and light trucks, according to a White House fact sheet released after Trump’s Oval Office remarks. The tariffs will take effect on April 3. The tariffs will also be applied to key imported auto parts, including engines, powertrain parts and electrical components.
The auto tariffs are set to target a sector that employs more than a million U.S. workers and relies on a supply chain intricately intertwined with Mexico and Canada.
Canadian Prime Minister Mark Carney on Wednesday called the measure “a direct attack on our workers.” The Canadian government plans to review its trade options, Carney said.
This is a developing story. Please check back for updates.
(NEW YORK) — U.S. stocks dropped in early trading on Monday, suffering widespread losses a day after President Donald Trump declined to rule out the possibility of a recession.
The Dow Jones Industrial Average fell 515 points, or 1.2%; while the S&P 500 declined 1.4%. The tech-heavy Nasdaq plummeted nearly 2%.
Tesla, the electric carmaker led by Elon Musk, sank nearly 6%. United Airlines and Delta each fell more than 5.5%.
The selloff extended a drop-off from the previous week amid uncertainty stoked by Trump levying tariffs against Canada, Mexico and China, some of which were withdrawn or delayed. The S&P 500 recorded its worst week since September.
When asked about a potential recession in an interview broadcast on Sunday, Trump said tariffs imposed in recent days could bring about a “period of transition.”
“I hate to predict things like that,” Trump told Fox News in an interview taped on Thursday. “It takes a little time, but I think it should be great for us.”
In response to a question later on Sunday about his reluctance to rule out a recession, Trump said: “I tell you what, of course you hesitate. Who knows?”
Since Inauguration Day, the Dow Jones Industrial Average has fallen 2.5%. The S&P 500 has dropped 5% over that period, while the Nasdaq has plummeted 9%.
The market slowdown has coincided with some worse-than-expected overall economic performance.
A jobs report on Friday showed U.S. employers hired 151,000 workers last month, falling short of the expected 170,000 jobs added.
In February, a key gauge of consumer confidence registered its largest monthly drop since August 2021, the nonpartisan Conference Board said last month. The share of consumers who expect a recession within the next year surged to a nine-month high, the data showed.
Still, some measures of consumer sentiment improved. Consumers’ assessment of current business conditions moved higher, while an uptick in purchasing plans for a home extended a monthslong recovery.
Mortgage rates also have dropped for seven consecutive weeks, FreddieMac data showed. The average rate for a 30-year fixed mortgage stands at 6.63%, its lowest level since December.
This is a developing story. Please check back for updates.
(NEW YORK) — As Tesla stock has fallen in recent weeks, members of the board and an executive at Elon Musk’s company have been selling off millions of dollars in stock, according to filings with the U.S. Securities and Exchange Commission.
Together, four top officers at the company have offloaded over $100 million in shares since early February.
Last week, longtime Musk ally James Murdoch — the estranged son of Fox boss Rupert Murdoch and a board member since 2017 — became the latest to do so, exercising a stock option and selling shares worth approximately $13 million, according to an SEC filing. The sale took place on March 10, coinciding with the stock’s largest single-day decline in five years.
According to one filing, the shares were sold “to cover the exercise price relating to the exercise of stock options to purchase 531,787 shares, which are scheduled to expire in 2025.”
Elon Musk’s brother, Kimbal Musk, who also sits on the board, unloaded 75,000 shares worth approximately $27 million last month, according to a filing.
The chairman of the board, Robyn Denholm, has offloaded more than $75 million dollars worth of shares in two transactions in the past five weeks, federal filings show. The selloffs made by Denholm came as part of a predetermined sales plan.
A number of board members and executives made similar moves in November and December. But the recent sales come at a tumultuous time for Tesla, with the stock falling nearly 50% from a peak in mid-December. The company’s shares have suffered most of those losses since President Donald Trump took office and Musk began his controversial governmental cost-cutting efforts as the head of the newly created Department of Government Efficiency.
“Whenever insiders, including directors, are selling shares, it’s not a positive signal,” Jay Ritter, a professor of finance at the University of Florida, told ABC News.
However, Ritter added, an exception applies to the predetermined sales plan adopted by Denholm in July 2024, which marks a routine effort to avoid the perception an officer unloaded shares based on inside information.
“Filing a plan months ago to sell some of those shares over time is common,” Ritter said.
Tesla did not immediately respond to ABC News’ request for comment.
Seth Goldstein, an analyst at research firm Morningstar who studies the electric vehicle industry, said some of the stock sales may owe to personal financial choices made by individual officers.
“While a sale doesn’t necessarily mean an executive or board member feels negatively about a company’s outlook, it could mean they think the stock is at a fair price or even overvalued,” Goldstein said.
The share selloffs made by board members and executives totaled about $118 million, but the transactions often came after the individuals exercised stock options, the costs of which totaled about $16 million. The officers ended up with a profit of just over $100 million.
ABC News previously reported on concerns from shareholders and pension funds, some of whom have called on Musk to turn his attention back from slashing government spending to running his car company.
Tesla Chief Financial officer Vaibhav Taneja also sold off shares totaling more than $5 million over recent weeks. Some of those transactions came as part of predetermined sales plans, but a transaction earlier this month did not stem from a scheduled sale.
(WASHINGTON) — The Federal Reserve held interest rates steady on Wednesday, just days after President Donald Trump called on the central bank to lower them.
The announcement put the central bank on a potential collision course with Trump, though a longstanding norm of independence typically insulates the Fed from direct political interference.
The decision to maintain the current level of interest rates pauses a series of three consecutive interest rate cuts imposed by the Fed over the final months of 2024.
The Federal Open Market Committee (FOMC), a policymaking body at the Fed, said on Wednesday that the central bank remains attentive to concerns centered on the potential for both a rise in unemployment and a surge of inflation. Inflation stands at a moderately elevated rate, while unemployment remains at a historically low level, the FOMC added.
Taken together, those two considerations — employment and inflation — make up the Fed’s “dual mandate.”
“The Committee judges that the risks to achieving its employment and inflation goals are roughly in balance,” the FOMC said.
“The economic outlook is uncertain, and the Committee is attentive to the risks to both sides of its dual mandate.”
The Fed indicated last month that it would cut interest rates at a slower pace than it had previously forecast, however, pointing to a bout of resurgent inflation. That forecast sent stock prices plummeting, though markets have broadly recovered the losses.
Inflation has slowed dramatically from a peak of more than 9% in June 2022, but price increases remain nearly a percentage point higher than the Fed’s target rate of 2%.
During a virtual address to the World Economic Forum in Davos, Switzerland, last week, Trump demanded a drop in interest rates after calling for a reduction of oil prices set by a group of nations known as OPEC, which includes Saudi Arabia.
The prospect of low oil prices will enable the Fed to dial back its fight against inflation and bring down interest rates, Trump said.
“I’m going to ask Saudi Arabia and OPEC to bring down the cost of oil,” Trump said, later adding: “With oil prices going down, I’ll demand that interest rates drop immediately.”
The U.S. does not belong to OPEC, nor does the president play a role in the organization’s decisions regarding the price of oil sold by its member states.
Several past presidents have sought to influence the Fed’s interest rate policy, including Trump, who repeatedly spoke out in favor of low interest rates during his first term.
On the campaign trail in August, Trump said a U.S. president should have a role in setting interest rates.
Fed Chair Jerome Powell struck a defiant tone in November when posed with the question of whether he would resign from his position if asked by Trump.
“No,” Powell told reporters assembled at a press conference in Washington, D.C., blocks away from the White House.
When asked whether Trump could fire or demote him, Powell stated: “Not permitted under the law.”
The Fed retreated in its fight against inflation over the final months of last year, lowering interest rates by a percentage point. Still, the Fed’s interest rate remains at a historically high level of between 4.25% and 4.5%.
Last month, Powell said the central bank may proceed at a slower pace with future rate cuts, in part because it has now lowered interest rates a substantial amount.
Powell also said a recent resurgence of inflation influenced the Fed’s expectations, noting that some policymakers considered uncertainty tied to potential policy changes under Trump.
“It’s common-sense thinking that when the path is uncertain, you get a little slower,” Powell said. “It’s not unlike driving on a foggy night or walking around in a dark room full of furniture.”
