Stocks skidded in afternoon trading after the White House signaled that President Trump on Wednesday would announce more tariffs, with the latest salvo targeting U.S. auto imports.
The S&P 500 dropped 64 points, or 1.1%, to close at 5,712, the Dow Jones Industrial Average fell 0.3% and the Nasdaq Composite nosed down 2% as investors pulled back from major technology players.
Shares of automakers also slid, with General Motors sinking 3.2% and Stellantis, the parent company of Chrysler, Dodge, Jeep and Ram, dropping 3.5%. The Detroit automakers’ manufacturing plants and supply chains are spread across North America, so additional tariffs would raise their costs and crimp profits.
Tesla shares, which have slumped this year because of disappointing sales and consumer unhappiness over CEO Elon Musk’s involvement with the Trump administration, fell nearly 6% and are down 33% this year.
Consumers are also likely to feel the sting of additional import duties. New tariffs on U.S. car imports could drive up vehicle costs between $2,000 and $12,200 for some models, Anderson Economic Group has estimated.
Beyond the impact on the auto sector, investors have been rattled by President Trump’s protectionist trade policies. The U.S. is scheduled to announce a raft of tariffs on April 2, including 25% duties on imports from Mexico and Canada, along with even more sweeping matching levies on a number of U.S. trading partners.
“The fact of the matter is that Trump remains firmly wedded to a Tariff First policy, his pain threshold is high and there are no voices around him counseling restraint or prudence,” Adam Crisafulli, head of investment advisory firm Vital Knowledge, said Wednesday in a note to investors.
He added, “Even those who might agree with the long-term benefits of tariffs have to acknowledge there will be a multi-quarter period of substantial disruption to the economy, with softer growth and higher inflation.”
Alain Sherter is a senior managing editor with CBS News. He covers business, economics, money and workplace issues for CBS MoneyWatch.
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