Concerns Over Reciprocal Tariffs Lead to a Decline in New York Stock Market

Tesla Plummets Ahead of Wednesday's Q1 Vehicle Delivery Announcement

NVIDIA and Automakers with High Import Dependency Also Weak

Amidst prevailing concerns over reciprocal tariffs and auto tariffs, the U.S. stock market started on a downward trend on the 31st (local time).

At around 10 a.m. Eastern Standard Time, the S&P 500 fell by 1%, and the Nasdaq Composite plunged by 2% as tech stocks like NVIDIA and Tesla were heavily sold off. The Dow Jones Industrial Average also dropped by 0.5%.

A series of tariffs announced by Trump will take effect from April 3. This includes a 25% tariff on "all cars not produced in the U.S." Additionally, reciprocal tariffs, which Trump has dubbed the 'Day of Liberation,' will be announced against countries with large trade deficits with the U.S. or those imposing tariffs on U.S. imports.

According to a report by the Wall Street Journal (WSJ) the previous day, President Trump has reportedly urged his advisors reviewing the tariff plan to take a more aggressive stance in recent days.

NVIDIA, which has a high dependency on imported chip materials, fell to $103.65 early in the session but was trading at $105.25 at around 10 a.m. Eastern Standard Time.

Tesla, which is set to announce its Q1 vehicle delivery results on Wednesday, fell by 5.8% to $248 after Stifel's analyst lowered the target price. General Motors, affected by auto and auto parts import tariffs, fell by 1.2%, Ford Motor by 0.9%, and Stellantis, with a high import ratio, by 2.4%.

Barclays' equity strategist Emmanuel Cau said, "Tariff risks are priced into the market, but no one wins in a trade war, and global growth prospects are clouded." He added, "Negotiations are likely to start after April 2, leading to prolonged uncertainty over the final scope, level, and timing of tariffs."

The S&P 500 fell into correction territory in March after setting a record high in February. By the close on Friday, it was 9.2% below its all-time high. It also fell by more than 6% in March, marking the largest monthly decline since a 9.3% drop in September 2022.

The Nasdaq fell by 8% in March, and the Dow fell by 5.2%. The Nasdaq is expected to record its largest quarterly decline since a 22.4% plunge in Q2 2022, with a 10.3% drop in Q1.

This week, various U.S. employment and manufacturing-related economic indicators will be released. In particular, the March employment report released by the Department of Labor on the morning of April 4 is expected to impact market sentiment.

Guest Reporter Kim Jung-ah kja@hankyung.com