Reciprocal Tariff D-Day... New York Stock Exchange Attempts Rebound After Initial Drop
Summary
- It was reported that the U.S. stock market started with a decline as Trump's reciprocal tariff announcement was scheduled, but reduced its losses.
- It was stated that the preference for safe assets led to a record high in gold prices and an increase in bond prices.
- It was reported that the stock price volatility increased due to the Q1 performance announcements of Tesla and Rivian Automotive.
Gold Prices Break Record High Again
Tesla Falls Due to Decrease in Q1 Vehicle Sales
The U.S. stock market started with a decline on the 2nd (local time) as Trump's reciprocal tariff announcement was scheduled.
The S&P500, which started with a 1% drop right after the opening, reduced its decline to 0.3% by 10:05 AM Eastern Standard Time. The Nasdaq Composite, which started with a 1.5% drop, also reduced its decline to 0.3%. The Dow Jones Industrial Average fell by 0.2%. The Cboe Volatility Index (VIX), known as Wall Street's fear gauge, surpassed 23, exceeding the level of 20, indicating growing concerns among traders.
The preference for safe assets led to another rise in bond and gold prices.
The 10-year U.S. Treasury yield fell by 2 basis points (1bp=0.01%) to 4.133%, reaching the lowest level of the year. Bond yields and bond prices move inversely. Spot gold, which has been hitting record highs this week, rose 0.7% to $3,170 per troy ounce on the New York Mercantile Exchange, setting another record high.
Tesla (TSLA) announced Q1 vehicle deliveries of 336,681 units, falling short of Wall Street consensus, and is trading at $260, down 3.1%. Rivian Automotive (RIVN) announced it delivered 8,640 vehicles in Q1, matching Wall Street estimates, but fell 3.6%. This is a 36% decrease compared to the previous year.
Nvidia (NVDA), which imports chips for Graphics Processing Units (GPU) from Taiwan and South Korea, continued its decline, falling 0.9% to $109 in early trading. It is unclear whether President Trump will include tariffs on semiconductors.
Newsmax (NMAX), a conservative media company that went public on the New York Stock Exchange this Monday, surged 735% on the first day and rose 179% on the 1st, but fell 17% today.
President Trump will announce a reciprocal tariff plan targeting all U.S. trade partners at the White House at 4 PM local time (5 AM on the 3rd in Korea). The White House stated that these tariffs will take effect immediately.
However, Treasury Secretary Scott Besant told lawmakers that these tariffs will serve as a "cap," and the announced tariffs will be the maximum level, as stated in an interview with CNBC by Oklahoma Republican Kevin Hern. This suggests that countries will have to negotiate to lower tariffs based on the proposed tariffs.
The uncertainty over Trump's tariffs has fueled market volatility, leading the S&P500 to decline in five of the past six weeks.
Guest reporter Kim Jung-ah kja@hankyung.com
Korea Economic Daily
hankyung@bloomingbit.ioThe Korea Economic Daily Global is a digital media where latest news on Korean companies, industries, and financial markets.
