On February 3rd, automakers and large-cap tech stocks faced significant losses amid a broader equity downturn triggered by President Donald Trump's extensive measures against Mexico, Canada, and China, raising concerns about a potential global trade conflict.
Investors sought refuge in the dollar and U.S. Treasuries as Mexico and Canada pledged retaliatory tariffs, while China announced plans to contest Trump's trade actions at the World Trade Organization.
In the premarket session, General Motors shares fell by 6.4%, Ford by 3.8%, and Tesla by 2.9%. U.S.-listed e-commerce companies such as PDD Holdings saw a decline of 4.5%, while Alibaba dropped by 1.9%.
Tech giants experienced notable declines, as Microsoft decreased by 1.5%, Apple by 1.9%, and Amazon by 2.3%. The Russell futures pointed to significant drops in stocks focused on the domestic market, with a 2.2% slump.
Regarding the impact of the tariffs, J.P. Morgan's chief economist, Bruce Kasman, highlighted concerns about disrupted supply chains and reduced business sentiment in North America.
Although Trump recognized the short-term disruptions caused by tariffs, he hinted at significant actions against the European Union. Additionally, the cryptocurrency market suffered losses, including a 5.8% drop in Coinbase's shares, with Marathon Digital and Riot Platforms miners each down by approximately 6%, as bitcoin slid below the $100,000 threshold.
Kasman expressed skepticism about the Trump administration's commitment to business-friendly policies amidst the evolving trade landscape, cautioning against unintentionally unfavorable stances.