Global Markets Slide Spooked By Trump Auto Tariffs
Tyler Durden

US stock futures faded earlier gains, but were also off session lows after a tariff-driven selloff in equities on Wednesday which hit the Mag7 names. Futures on the S&P 500 are flat after Trump announced 25% uniform tariffs on auto imports, while Nasdaq futures dropped 0.3% amid a reversal of the Monday price action as investors seem to be back to the recession playbook ahead of April 2 announcement. Mag 7, Cyclicals and High Short Interest are among the worst performing baskets, while Defensives outperformed. AI and data center names faced a slew of negative catalysts so far this week, including NVDA’s China environmental curbs, sell-side report on MSFT lease cancellation, BABA’s comments earlier this week: NVDA-5.7%; JPM's Data Center basket -3.0%. Commodities are higher led by oil and base metals. Outside the US, China ADRs outperformed US domestics with KWEB up 54bps today as China PBOC adviser promised (once again) that China will ramp up stimulus if growth falters.

In premarket trading, shares of US automakers and auto-parts suppliers dropped with peers in Europe also declining following Trump’s tariff announcement. Gamestop fell as the company said it plans to offer convertible bonds to buy Bitcoin. Nvidia slips, leading Mag7 declines and extending losses into a third straight session amid growing concerns over the outlook for spending on AI (Alphabet -0.3%, Amazon -0.3%, Apple -0.4%, Microsoft -0.1%, Meta -0.5%, Nvidia -1.7% and Tesla +0.5%). Automaker stocks fall after President Donald Trump hit auto imports with a 25% tariff starting next week. Analysts say Ford and General Motors are set to see the biggest impact, while Stellantis and Tesla are in a better position (General Motors -6%, Ford -0.7%, Stellantis’s US-listed shares -1.6%; Auto-parts firms: Autoliv -3%, Magna -1.8, BorgWarner -0.7%). Here are some other notable premarket movers:

• 3D Systems (DDD) falls 5% after the 3D-printing company issued annual forecasts for revenue and adjusted gross margin that trailed Wall Street expectations.
• AMD (AMD) slips 3% after Jefferies downgraded the chipmaker to hold, with analysts citing limited traction in artificial intelligence among other negatives.
• Cava Group (CAVA) climbs 2% as the company will replace Altair Engineering Inc. in the S&P MidCap 400 effective prior to the opening of trading on March 31.
• Coursera (COUR) falls 2.2% after Bank of America resumed coverage of the online educational firm with an underperform rating, citing a “muted” 2025 revenue growth outlook.
• GameStop (GME) drops 6% as the company seeks to sell $1.3 billion of convertible bonds to fund Bitcoin purchases as it embraces a strategy that was developed by the cryptocurrency advocate Michael Saylor.
• Jefferies (JEF) slips 5% after fiscal first-quarter earnings declined amid a drop in investment-banking and capital-markets revenue, with activity hurt by uncertainty around US policy and geopolitics.
• MicroVision (MVIS) falls 5% after the electronics components company reported fourth-quarter revenue that trailed Wall Street projections and a wider-than-anticipated loss.
• Petco Health and Wellness (WOOF) gains 6% after the retailer provided a 1Q forecast for adj. Ebitda that topped expectations and said the company expects double-digit improvement in the metric this year.
• Robinhood Markets (HOOD) climbs about 1% after the financial services platform introduced several new products at a Wednesday event, including Robinhood Strategies, Robinhood Banking and Robinhood Cortex.
• Soleno (SLNO) jumps 36% after the biotech won US FDA approval for its Vykat extended-release tablets for the treatment of a condition where sufferers have a sense of being hungry all the time.
• Verint (VRNT) drops 12% after the customer-service software firm reported adjusted revenue and profits for the fourth quarter that fell short of Wall Street’s expectations.

Worries over President Donald Trump’s tariffs hit markets again on Wednesday, with the S&P 500 halting a three-day win streak to close down 1.1%. Trump implemented a 25% levy on auto imports, while threatening further duties on the EU and Canada. The S&P 500 fell 10% between February and March over concern that harsher tariffs will lead to slower economic growth and higher inflation. The index then staged a mild recovery since hitting a low on March 13, but now all eyes are on the so-called reciprocal tariffs, with details due on April 2, the so-called "Liberation Day."

“Tariffs are front and center on people’s minds,” said Arun Sai, senior multi-asset strategist at Pictet Asset Management. “We all know that tariffs are stagflationary and markets have been trying to price that to different extents. What we don’t know yet is what’s the ultimate lasting impact.”

The tariff drama is also casting doubt over European equities’ recent outperformance against US peers. Pictet’s Sai has downgraded his view on Europe, citing an inevitable hit to economic growth and earnings. Over at BlackRock Investment Institute, managers expect US stocks to soon regain their edge. 

“We have been overweight global equities over fixed income for many, many quarters – even as valuations looked increasingly stretched. But for the first time in years, we find ourselves genuinely worried about risk assets,” said Ajay Rajadhyaksha, global chairman for research at Barclays. “Cash allocations should be higher until policy clarity stages at least a mild comeback.”

Technology stocks have come under heavier pressure in recent sessions, as investors question how much longer will the artificial intelligence boom cycle last. Such anxiety resurfaced on Wednesday after a team of TD Cowen analysts said Microsoft Corp. has walked away from new data center projects in the US and Europe.

European stocks also fell as the US pushed ahead with harsh tariffs on automakers and threatened more sweeping trade levies, reinforcing investor concern about the hit to global economic growth. The Stoxx 600 slid 0.5%. Stellantis NV, which makes the Jeep Compass SUV in Mexico, and Mercedes-Benz Group AG fell about 3%. Traders also sold US auto shares, with General Motors Co. tumbling 6% in pre-market trading. Here are some of the biggest movers on Thursday:

• Next shares rise as much as 9% after the UK fashion retailer said it’s made a stronger-than-expected start to the new year and boosted its profit guidance.
• Umicore shares rise as much as 11% after the materials technology company outlined ambitious targets for 2028, with its earnings goal coming in above analyst expectations.
• Coor shares gain as much as 6.1% after the Swedish facility services firm’s price target was raised to SEK52 from SEK48 at DNB.
• Sofina advances as much as 3.3% after releasing its full-year results, with KBC Securities subsequently boosting its price target and saying this is the year in which the investment company “bounces back.”
• European auto stocks fall after President Donald Trump announced a “permanent” 25% tariff on any car not produced in the US.
• UBS shares fall as much as 5.6% as Bank of America downgrades the lender to underperform, saying the lack of clarity on regulation is likely to drag on for months.
• Air France-KLM, EasyJet shares fall as Deutsche Bank downgrades the stocks. The bank cuts earnings forecasts for firms across Europe’s transport sector, noting near-term downside risks to GDP for the US and Europe.
• MFE shares dropped as much as 7.2% in Milan, before paring declines, after the company owned by Italy’s Berlusconi family launched a tender offer on ProSiebenSat.1 Media in a bid to tighten its grip over the German entertainment company.
• Trigano shares drop as much as 15%, the most since 2021, after the maker of motorhomes and leisure vehicles reported a steeper fall in quarterly revenue than anticipated.
• eDreams falls as much as 18% after a shareholder offloaded shares in the firm at a discount to yesterday’s close.
• Kontron shares dive as much as 6.2%, the most in over two months, after the German IT firm experienced a more challenging fourth-quarter than anticipated, according to analysts.

Asian equities edged lower as President Donald Trump’s auto tariffs and threat of more levies on Europe and Canada weighed on sentiment. Chinese shares advanced. The MSCI Asia Pacific Index fell as much as 0.6% before paring the loss, with benchmarks in South Korea and Taiwan underperforming. Toyota Motor slumped following Trump’s decision to slap 25% tariffs on all cars that aren’t manufactured in the US. TSMC was the biggest drag on the gauge after a report that China’s energy rules for advanced chips could dent Nvidia’s sales. Asian equities have been range-bound recently as traders brace for Trump’s renewed tariff offensive to land on April 2. For the month, the MSCI Asia benchmark has gained nearly 3% and is headed for its best monthly performance since September. Benchmarks on Chinese and Hong Kong stocks rallied before ending the day with modest gains of around 0.3%. Optimism over China’s AI breakthrough and supportive macro policy has helped the market beat peers this year. 

In FX, the dollar slipped as investors weighed the possibility that President Trump’s latest tariffs could limit the country’s growth potential, although the realty is that the tariffs will lead to a recession elsewhere much faster. The Bloomberg Dollar Spot Index slipped 0.1%, reversing the previous day’s 0.3% gain. JPY and CAD are the weakest performers in G-10 FX, while GBP and NZD are outperforming. Trump “could be recognizing that his trade policies might be having a ricocheting effect on the US consumers and business owners,” said Fiona Lim, a senior strategist at Malayan Banking Bhd in Singapore. “That makes US dollar gains susceptible to reversal." USD/JPY rose 0.3% to 150.97, outperforming as the Trump’s latest announcement to slap a 25% tax on Japanese auto imports hit home the prospect that the Japanese economy will suffer from tariffs, keeping the Bank of Japan cautious on raising interest rates. Earlier, the Norwegian krone recovered losses versus the euro after Norges Bank delayed a cut in borrowing costs until later this year as inflation picked up. Elsewhere in Asia, Indian stocks rose ahead of the expiry of monthly derivative contracts. The Nifty 50 Index is on pace for its biggest monthly advance since at least June 2024. 

In rates, the 10-year Treasury yield rose 4bps to 4.39% after St Louis Fed President Musalem stuck to the central bank’s position that it is in no hurry to keep cutting rates, while voicing concerns that trade levies will fan inflation. Musalem said it’s not clear the impact of tariffs will prove temporary, and cautioned that secondary effects could prompt officials to hold interest rates steady for longer. Euro-area bond yields slipped as expectations grew that the central bank will cut interest rates to cushion the fallout from trade-related shocks; German 10-year yields have nearly erased their drop and are at 2.78%. UK bonds slumped across the curve, underperforming US Treasuries and German bunds, amid lingering concerns over the government’s fiscal position. UK 10-year yields are up 7 basis points to 4.80%, and at the highest since January. Focal points of US session include $44 billion 7-year note auction at 1pm New York time and economic data slate including weekly jobless claims and final 4Q GDP revision. 

In commodities, WTI crude is trading within Wednesday’s range, falling 0.1% to around $69.56. Spot gold is up roughly $35 to near $3,055/oz.  Gold has been benefiting from haven demand. Goldman Sachs Group Inc. ramped up its forecast to $3,300 an ounce by year-end, the latest in a series of banks to up their prediction. Bitcoin has risen to above $87,000. 

The US economic calendar includes 4Q GDP revision, February wholesale inventories, and weekly jobless claims (8:30am), February pending home sales (10am) and March Kansas City Fed manufacturing activity (11am). Fed speaker slate includes Barkin and Collins (both 4:30pm)

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