[New York Stock Market] Nasdaq Drops 2% After Trump Announces Auto Tariffs, Falling for the First Time in Four Days...

White House to Announce New Auto Tariffs This Afternoon
Tariff Front Expands Beyond Steel and Aluminum
Investor Sentiment Plummets Amid Tariff Uncertainty
Q4 GDP to be Announced on the 27th, PCE Price Index on the 28th

The three major indices of the U.S. New York Stock Exchange all closed lower on the 26th (local time) after four days. Investor sentiment sharply froze due to concerns over the expansion of tariffs as the White House announced new automobile tariffs on the day. The Nasdaq index plunged more than 2%.

Reuters Yonhap News

On this day in the New York stock market, the blue-chip-focused Dow Jones Industrial Average (Dow) closed at 42,454.79, down 132.71 points (0.31%) from the previous trading day. The large-cap-focused S&P 500 index fell 64.45 points (1.12%) to 5,712.2, and the tech-heavy Nasdaq index slid 372.84 points (2.04%) to close at 17,899.01.

By individual stocks, automobile-related shares declined. U.S. automaker General Motors (GM) dropped 3.12%. Stellantis fell 3.55%. Meanwhile, Ford barely closed higher with a slight gain of 0.1%. AI leader Nvidia fell 5.74%, and U.S. electric vehicle maker Tesla dropped 5.58%, showing a generally weak trend among tech stocks as well.

The White House's official announcement that President Donald Trump would expand the tariff front to automobiles following steel and aluminum tariffs acted as a catalyst for the stock price decline, causing the market to fail to rise for four consecutive days. White House spokeswoman Caroline Levitt stated that at 4 p.m. Eastern Time (5 a.m. Korean time on the 27th), President Trump planned to hold a press conference in his Oval Office to unveil new automobile tariffs. This is the second time President Trump has officially announced tariffs on individual items since the steel and aluminum tariffs took effect on the 12th. Earlier, President Trump had announced in February that he would impose a 25% tariff on automobiles, semiconductors, and pharmaceuticals.

Next week, President Trump is scheduled to announce the long-anticipated reciprocal tariffs. Regarding this, in an interview with Newsmax the previous day, President Trump said it was likely to be "lenient" rather than reciprocal. On the 21st, he mentioned "flexibility" regarding reciprocal tariffs, and on the 24th, he said "exemptions could be given to several countries," lowering his tone day by day. However, the market's caution remains unresolved as President Trump's tariff statements and policies continue to be inconsistent and erratic.

Inflation caused by tariffs and the possibility of economic slowdown are also pressuring investor sentiment. The U.S. consumer sentiment index released the previous day showed widespread concerns about economic downturn. According to the economic research group Conference Board (CB), the consumer confidence index for March was 92.9, the lowest in four years since early 2021. The expectations index, reflecting the short-term outlook six months ahead, fell 9.6 points from the previous month to 65.2, the lowest in 12 years, and the expected inflation one year ahead rose from 5.8% in February to 6.2% in March, marking the highest in two years. Since the consumer confidence index is an indicator that reflects consumers' confidence in the U.S. economy, this survey result shows that consumers' economic outlook has become more pessimistic recently.

Michael Brown, chief strategist at Pepperstone Group, said, "The uncertainty on the tariff front is so absurdly high that it is almost impossible for companies and consumers to plan for more than a day into the future," adding, "It is still nearly impossible for market participants to price in the risks."

Art Hogan, chief market strategist at B. Riley Wealth Management, said, "Tariffs will continue to attract attention," and "Traders are looking for new information regarding the U.S. reciprocal tariffs set to take effect on April 2."

Investors are also awaiting economic indicators scheduled for release this week. On the 27th, the final GDP growth rate for the fourth quarter of last year will be announced, and on the 28th, the core Personal Consumption Expenditures (PCE) price index for February will be released. Based on Bloomberg's estimates, the core PCE price index is expected to have risen 2.7% year-over-year, an increase from 2.6% in January.

Bond yields are on the rise. The 10-year U.S. Treasury yield, a global bond yield benchmark, rose 4 basis points (1bp = 0.01 percentage points) from the previous trading day to 4.35%, and the 2-year U.S. Treasury yield, sensitive to monetary policy, increased 2 basis points to 4.01% compared to the previous day.