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The National
03-03-2025
- Business
- The National
US stocks retreat after Trump confirms Canada and Mexico tariffs
US stocks retreated on Monday, continuing a sell-off from February as economic concerns grew after President Donald Trump confirmed he would be implementing tariffs on Mexico and Canada on Tuesday. In an executive order signed on February 1, Mr Trump said he would impose a 25 per cent tariff on imports from Canada and Mexico and a 10 per cent levy on Canadian energy products. Chinese goods will also face a 10 per cent levy on top of the 10 per cent that was imposed earlier this year. 'They're all set. They go into effect tomorrow,' Mr Trump said, adding 'reciprocal tariffs' will go into effect on April 2. The Dow Jones Industrial Averaged closed 649.67 points – or 1.48 per cent – lower on Monday after being up nearly 200 points earlier in the day. Nvidia also fell 8.69 per cent, with shares trading at $114.06, as the tech-heavy S&P 500 tumbled 1.76 per cent. When asked about tariffs during an earnings call last week, Nvidia chief financial officer Colette Kress told investors they remain 'an unknown until we understand further what the US government's plan is'. Meanwhile, the Nasdaq Composite dropped 2.64 per cent and the small-cap Russell 2000 tumbled 2.86 per cent. Bitcoin was down nearly 9 per cent at $85,999.12, erasing most of its gains after Mr Trump's crypto reserve announcement at the weekend. Brent, the benchmark for two thirds of the world's oil, fell 1.63 per cent to $71.62 a barrel. US West Texas Intermediate closed down 1.99 per cent at $68.37. Gold climbed 1.77 per cent to $2,898.80. Tariffs raise economic concerns The tariffs on Mexico and Canada had been paused after Mr Trump introduced them last month, but he said on Monday there was 'no room left for negotiations'. Earlier on Monday, Mexican President Claudia Sheinbaum said she was waiting for Mr Trump's decision before deciding on a course of action. Canadian Foreign Minister Melanie Joy said her country is ready to proceed with retaliatory tariffs Prime Minister Justin Trudeau announced in February. Economists generally argue that tariffs will increase costs for consumers, lead to higher inflation and slow economic growth. The Bank of Canada has previously warned a trade war between the two countries would lead to both economies suffering lower growth and higher inflation. Bank of Canada Governor Tiff Macklem has also said previously said 'tariffs mean economies simply work less efficiently'. The 10-Year Treasury yield dipped more than six basis points to 4.161 per cent. One basis point equals 0.01 per cent. Yields and prices move in opposite directions. Meanwhile, an inflation report last week showed consumer spending fell 0.2 per cent in January, after economists had anticipated it would increase. A separate survey showed the Conference Board's consumer confidence index fell sharply over concerns of how Mr Trump's policies would affect the economy. 'There was a sharp increase in the mentions of trade and tariffs, back to a level unseen since 2019,' Stephanie Guichard, senior economist of global indicators at the Conference Board, said in a news release. The Federal Reserve Bank of Atlanta's GDPNow model estimates the US economy will contract by 2.8 per cent in the first three months of this year, down from its previous estimate of minus 1.5 per cent. Traders anticipate the US Fed will issue several rate cuts this year in response to a slowing economy, beginning in June, according to CME Group data. St Louis Fed President Alberto Musalem – a voting member on the central bank's rate-setting committee – said on Monday that 'recent data have been weaker than expected, posing some downside risk to growth' although the outlook for 'solid economic growth looks good'.
The National
25-02-2025
- Automotive
- The National
Tesla shares dip on slumping Europe sales as valuation falls below $1tn
Tesla shares tumbled on Tuesday after a sharp drop in sales in Europe, while US consumer confidence dragged Wall Street lower. The electric vehicle maker's sales in Europe and the UK fell by 45.2 per cent year on year in January, according to the European Automobile Manufacturers' Association (Acea). Tesla 's drop bucked a wider trend in Europe, where new battery-electric car sales rose by 34 per cent in January and captured a 15 per cent market share, according to Acea. Tesla closed 8.39 per cent lower when trading ended in the US on Tuesday at $302.80 a share. The company's valuation also fell below $1 trillion, to $973.96 billion. Tesla reported a drop in sales for the first time in 2024, as the company faces increased competition from China's BYD and other car makers. It also comes as Tesla chief executive Elon Musk intrudes more into European politics. Mr Musk threw his support behind Germany's far-right AfD party and called to congratulate its co-leader on increasing its support from the last election. Mr Musk is also a close associate of US President Donald Trump after pouring billions of dollars into his 2024 electoral campaign. Since taking charge of the so-called Department of Government Efficiency (Doge) on January 20, he has sought to drastically reduce the size of the US federal government and cut off foreign aid. US consumer confidence dips US markets remained on edge before Nvidia earnings on Wednesday, as weak consumer confidence dragged stocks lower. Analysts estimate a quarterly revenue of $38.16 billion for 2025's fourth quarter and an earnings per estimate forecast of 0.85, according to data compiled by Yahoo Finance. Nvidia fell by 2.8 per cent to $126.63 a share, dragging the Nasdaq Composite down 1.35 per cent. The S&P 500 fell 0.47 per cent while the Dow Jones Industrial Averaged climbed 159.95 points, or 0.37 per cent. Markets dipped after a new report showed US consumer confidence dipped sharply in February over growing concerns of how Mr Trump's policies will affect the economy. The Consumer Board's Consumer Confidence Index fell by seven points to 98.3, its largest drop since August 2021. 'There was a sharp increase in the mentions of trade and tariffs, back to a level unseen since 2019. Most notably, comments on the current administration and its policies dominated the responses," said Stephanie Guichard, senior economist of global indicators at the Conference Board. Average 12-month inflation expectations also surged from 5.2 per cent to 5.6 per cent. 'Tariff worries are rattling consumers' cages in a way that they perhaps did not in the current President's first term,' Wells Fargo economists Tim Quinlan and Jeremiah Kohl wrote in a note. Federal Reserve officials say it is still too soon to know how Mr Trump's policies will affect the inflation battle, although they have indicated in recent weeks they are willing to hold interest rates steady for several months amid policy uncertainty and a lack of progress in bringing down inflation. 'All this uncertainty argues for caution as we look to wrap up the inflation fight. If headwinds persist, we may well need to use policy to lean against that wind,' Richmond Fed president Tom Barkin said earlier on Tuesday.
