TPTP 03/04/25

Market Minute 3/4/25:⏱️Stocks Tank as Trump Tariffs Kick in

Mike Larson | Editor-in-Chief

Stocks tanked yesterday as investors priced in the likely negative impact of new tariffs on global trade and economic growth. They’re falling further this morning along with crude oil and the US dollar. Gold and silver are rising, while Treasuries are flat.

President Trump let his tariffs take effect on China, Canada, and Mexico…and the stock market responded with a Bronx cheer. The major averages tanked anywhere from 1.5% to 2.6%, with the S&P 500 suffering its worst daily drop so far in 2025. Treasuries rose in price, with yields falling to four-month lows, on the assumption tariffs will slow the economy further.

The North American auto industry is likely to be one of the hardest-hit groups. Car and truck parts cross the borders in Mexico, the US, and Canada multiple times during the production process, meaning tariffs could drive vehicle costs notably higher for consumers. Shares of Ford Motor Co. (F) and General Motors Co. (GM) are down 2% and 11%, respectively, year-to-date.

F, GM, TGT, BBY (YTD % Change)

Meanwhile, Target Corp. (TGT) warned that tariff-related uncertainty and costs will harm first-quarter earnings. Best Buy Co. (BBY) is also sinking despite reporting solid quarterly results. The problem? Worries tariffs could drive up the cost of electronics and appliances sold in the retailer’s stores. TGT was already down 9.9% YTD, while BBY was up just over 1%.

All in all, economists say certain food items will likely get pricier soon. So could things like smartphones because they are almost entirely produced in China. Trump and his team are gambling that short-term economic pain will be worth it because tariffs will shift more manufacturing to the US over the longer term. The president will deliver an economic address in Congress tonight to try to sell that plan to lawmakers and the American people.

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