Dow Jones posts two days of losses as Trump auto tariffs weigh on stocks

Benchmark indices on Wall Street fell again on Thursday as investors weighed the latest tariff salvo from President Donald Trump on automakers.

The Dow Jones shed 150 points, while the S&P 500 declined by 0.3%. The tech-heavy Nasdaq also ended 0.5% lower.

Car giants from Toyota Motor Corp. to Mercedes-Benz Group AG and General Motors Co. got hit. AppLovin Corp. sank on a short report from Muddy Waters. Megacaps were mixed, with Apple Inc. up and Nvidia Corp. down. In late hours, Lululemon Athletica Inc. gave a gloomy outlook.
The bond market flashed concerns about inflation as short-dated Treasuries outperformed longer ones. The yield on 10-year Treasuries rose one basis point to 4.36%. The dollar wavered.

The move of imposing tariffs on auto imports overshadowed data showing the economy expanded at a quicker pace in the fourth quarter than previously estimated. A measure of inflation was revised lower.

To Bret Kenwell at eToro, the data won’t act as a major confidence boost for investors as their focus is firmly planted in the current economic landscape rather than the one from a few months ago.

Inflation remains at a disquieting level for the Federal Reserve. And Friday’s personal consumption expenditures price index is forecast to show signs of stickiness.

“The threat of further tariff escalation remains a key concern, but our economic forecasts do not call for a recession in the US,” said Mark Haefele at UBS Global Wealth Management.

For markets, the question is whether anything will be able to rise above the tariff noise, according to Chris Larkin at E*Trade from Morgan Stanley.

“In the near-term, the most likely scenario is more choppy trading, he said.

Pessimism among individual investors about the short-term outlook for stocks decreased in the latest sentiment survey from the American Association of Individual Investors. Meanwhile, optimism and neutral sentiment increased.

“With stocks getting a respite from the selling last week and into early this week, we expected some subsiding of the extremely high levels of bearish sentiment in the weekly survey from the AAII,” said Bespoke Investment Group strategists.

(With Inputs From Agencies.)