US Stock Market Opens Lower Amid Tariff Concerns on Cars and Semiconductors

Trump’s Tariff Threats Impact Semiconductor Stocks While Tesla Gains / AFP

The US stock market, which had reached an all-time high the previous day, opened lower as concerns over President Donald Trump’s ongoing tariff threats resurfaced. Investors reacted cautiously to potential new tariffs on semiconductors and automobiles, leading to a decline in major indexes.

As of 10:10 AM Eastern Time, the S&P 500 had fallen 0.2%, while the Nasdaq Composite dropped 0.4% and the Dow Jones Industrial Average slipped 0.2%. The 10-year US Treasury yield increased by one basis point to 4.562%. Meanwhile, the US dollar index edged up to 107.13, and spot gold prices saw a slight 0.1% increase to $2,939.41 per ounce. West Texas Intermediate (WTI) crude oil climbed 1.4% to trade at $72.89 per barrel.

Bitcoin, according to CoinDesk data, surged 2.14% from the previous session to reach $96,154.

Semiconductor Stocks Drop as 25% Tariff Fears Grow

Reports of Trump’s plan to impose a 25% tariff on semiconductor imports from Taiwan and South Korea sent shockwaves through the chip sector. Nvidia, a major buyer of foreign-made chips, declined 0.7% to $138.45, while Taiwan Semiconductor Manufacturing Company (TSMC) saw its American Depositary Receipt (ADR) fall 1% to $200.50. Intel, which had surged the previous day on acquisition rumors involving TSMC and Broadcom, tumbled 6%.

Tesla Benefits from Import Tariff on Foreign-Made EVs

While semiconductor stocks suffered, electric vehicle maker Tesla saw a notable gain. The company’s stock rose 2.6% to $363 per share, as investors anticipated a competitive advantage for Tesla due to a proposed 25% tariff on imported automobiles. Meanwhile, struggling EV startup Nikola filed for bankruptcy, causing its stock to plummet by 37%.

Market Uncertainty Grows Ahead of Federal Reserve Meeting Minutes

Market analysts pointed to growing uncertainty fueled by the tariff news, compounded by concerns over the Federal Reserve's stance on interest rate cuts. Winton, a strategist at Brown Brothers Harriman, noted that the "continuous tariff noise is making the Federal Reserve more cautious."

Investors were closely watching the Federal Open Market Committee (FOMC) meeting minutes, set to be released at 2 PM Eastern Time. Market expectations suggested that the minutes might indicate little inclination toward imminent interest rate reductions.

Piper Sandler’s senior market technician Craig Johnson commented that, despite inflation and tariff concerns, investors have not significantly pulled out of the market. However, he warned that volatile conditions could persist in the short term.