New York stock market is mixed as it evaluates Trump’s tariff threat… Car stock plummets

Trump announces additional 10% tariffs on China on first day of office
Mexico and Canada each impose a 25% tariff
GM and Ford, which have plants in Canada and Mexico, decline
Also pay attention to the release of November FOMC minutes

The three major indices of the New York stock market were mixed in the early trading on the 26th (local time). As U.S. President-elect Donald Trump predicted a “tariff bomb” on China, Mexico, and Canada, investors are watching the market as they evaluate the impact. The market’s attention is also focused on the minutes of the US Federal Reserve’s (Fed’s) November Federal Open Market Committee (FOMC) meeting, which will be released this afternoon.

As of 9:48 a.m. on this day in the New York stock market, the blue chip-centered Dow average was recording 44,524.72, down 0.47% from the previous trading day. The S&P 500 index, centered on large-cap stocks, is trading at 6,002.32, up 0.25%, and the Nasdaq index, centered on technology stocks, is trading at 19,164.79, up 0.58%.

The day before, President-elect Trump announced in a post on TruthSocial, a social networking service (SNS) he created, that he would impose an additional 10% tariff on China and 25% tariff on Mexico and Canada on his first day in office on January 20th next year. He emphasized that these tariffs will remain in effect until the invasion of the United States by fentanyl and other drugs and illegal aliens stops. As President-elect Trump announces a strong tariff policy, the market is carefully evaluating the impact.

“We are just seeing the beginning of volatility, and it will continue as the investigation continues,” said Justin Onuekwusi, chief investment officer at St. James Place. “Assessing whether tariffs are a threat, a promise or a negotiating tool. “It is very difficult,” he analyzed.

Adam Crisafulli, founder of Vital Knowledge, said, “Investors don’t entirely believe that tariffs will be implemented, and earnings have been quite good, so Wall Street appears to be overlooking the news.”

The market rallied the day before, paying attention to the appointment of the first Treasury Secretary for Trump’s second term. Investors were relieved by the news that veteran Wall Street investor Scott Bessent was named CEO of Key Square Group. This reflects expectations that Nominee Bessent will moderate President-elect Trump’s radical tariff hike and tax cut policies. However, some caution is raised that it remains to be seen whether he will be able to exert real influence on tariff policy, etc.

“It takes time for these policies to actually be implemented in the market,” said New Edge CIO Cameron Dawson.

The market is also waiting for the November FOMC minutes to be released at 2 PM Eastern Time on this day. It is expected to contain Fed members’ economic diagnosis and outlook, as well as their views on the future path of monetary policy. Investors are expected to look for hints about the Fed’s interest rate decision next month through the FOMC minutes. According to FedWatch of the Chicago Mercantile Exchange (CME), the federal funds interest rate futures market on this day had a 56.2% chance that the Fed would cut interest rates by 0.25 percentage points at the FOMC regular meeting held on December 17th and 18th, and a 43.8% chance that it would freeze interest rates. It is reflecting.

By stock, American automakers General Motors (GM) and Ford are down 7.51% and 2.68%, respectively. Both companies have automobile production bases in Canada and Mexico. Amgen, a global pharmaceutical company, is plummeting by 9.82% as the results of clinical trials for its obesity treatment failed to meet market expectations.

Government bond interest rates are rising. The U.S. 10-year maturity Treasury bond yield, a global bond interest rate benchmark, is recording 4.3%, up 4bp (1bp = 0.01% point) from the previous trading day. The interest rate on US 2-year Treasury bonds, which are sensitive to monetary policy, is trading at the previous day’s level of 4.26%.

The dollar index, which represents the value of the dollar against the currencies of six major countries, is trading at the 106.85 level, up 0.08% from the previous day.

International oil prices are rising. West Texas Intermediate (WTI) is trading at $69.49 per barrel, up $0.55 (0.8%) from the previous trading day, and Brent crude oil, the global crude oil price benchmark, is trading at $72.97 per barrel, up $0.49 (0.68%).

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