The New York stock market continued its downward trend on Thursday due to the shock of U.S. President Donald Trump’s proposed auto tariffs. This is the second consecutive day of decline, following the previous day.
While automotive stocks took a hit, Tesla turned upward with the prospect of becoming a “winner” from the proposed tariffs. However, it gave up most of its early gains by the afternoon, confirming that investors remain cautious about its prospects.
Meanwhile, Nvidia experienced a sharp sell-off toward the end of trading, dropping more than 2%. Since Tuesday, it has declined by over 8.2% in the past three days.
Tariff Concerns Continue to Weigh on Markets
The market continued to weaken after Trump signed an executive order imposing a 25% tariff on imported vehicles after the market closed the previous day.
With investors remaining cautious ahead of the reciprocal tariff announcement scheduled for April 2, the news that automobile tariffs could be implemented on the same day further dampened market sentiment.
The decline was relatively contained despite increased selling pressure in the final trading hours.
The Dow Jones Industrial Average shed 155.09 points (0.37%) to close at 42,299.70. The S&P 500 index fell 18.89 points (0.33%), ending at 5,693.31.
Nasdaq, which had been down about 0.2% for most of the day, saw a late surge of selling pressure. It ultimately closed down 94.98 points (0.53%) at 17,804.03.
Tesla’s Gains Narrow from 7.3% to 0.4%
Tesla’s stock struggled to maintain its early gains.
It initially soared at the opening bell.
Tesla stocks surged as Bernstein rated Tesla, and UBS identified Tesla and Rivian as the potential winners of Trump’s automobile tariffs.
By midday, Tesla’s stock had surged 7.3% to $291.84. However, the gains were gradually narrowed throughout the afternoon. The gain, which had exceeded 2%, shrank to around 0.4% just before the close.
Tesla ultimately finished the session at $273.13, up $1.07 (0.39%), showing little change from the previous day’s close.
In contrast, Rivian maintained its upward momentum, closing at $0.92 (7.60%) at $13.02.
The traditional Detroit Big 3 automakers, widely seen as potential losers under the proposed tariffs, faced significant pressure.
General Motors plummeted $3.75 (7.36%) to $47.20, while Ford dropped $0.40 (3.88%) to $9.90.
Stellantis, a joint venture between the U.S., Italy, and France, showed more resilience due to its diverse global operations. Its shares closed down $0.15 (1.25%) at $11.81.
Nvidia Slides 8.2% Over Three-Day Period
Nvidia extended its losing streak to three days, falling $2.33 (2.05%) to $111.43.
It has declined by more than 8.2% over the last three days.
Nvidia’s losses accelerated in the final hour of trading. Its decline was limited to around 0.5% until just before closing but dropped over 2% by the closing bell.
Despite the recent weakness, many analysts remain bullish on Nvidia’s prospects.
Bank of America analyst Vivek Arya recommended buying in an analysis note the previous day, stating that Nvidia’s stock decline may end.
Arya acknowledged that the upcoming “AI Spread Control” regulations, set to take effect on May 15, are the biggest short-term challenge Nvidia will face. However, he pointed out that the market’s concerns are exaggerated. These regulations, initiated during the Biden administration, are expected to be finalized by May 15.
Once implemented, government approval will be required to export AI semiconductors to certain countries designated by the administration.
Arya expressed optimism that Nvidia’s stock could rally significantly once these regulations take effect and uncertainty is resolved.
Bank of America maintains a buy rating on Nvidia and a $200 price target. It expects an 80% rise from the closing price of $111.43 over the next 12 months.
Susquehanna forecasted that the AI semiconductor market will triple from $120 billion in 2023 to approximately $360 billion by 2030, with Nvidia expected to capture a 77% market share.
Meanwhile, AMD, one of Nvidia’s main competitors in the AI semiconductor market, saw its shares tumble by over 3%.
Investment bank Jefferies downgraded AMD from buy to hold, citing concerns about the company’s ability to secure AI chip customers. The firm also lowered its price target from $135 to $120.
AMD shares fell $3.54 (3.21%) to close at $106.65.
