US Stock Market Opens Lower Following Trump's 'Movie Tariff' Remarks

Media Stocks Like Netflix Hit, Berkshire Falls on Buffett's Retirement

"China Trade Agreement Essential for Stock Market Record High Recovery"

On the 5th (local time), ahead of the Federal Reserve's policy meeting on the 6th and 7th, the US stock market opened lower as President Trump mentioned a 100% tariff on foreign-produced films.

At 10:10 AM Eastern Standard Time, the S&P 500 fell 0.6%. The S&P 500 halted its longest consecutive rise in 20 years recorded until last Friday. The Nasdaq Composite dropped 0.7%, and the Dow Jones Industrial Average fell 0.2%.

The 10-year Treasury yield rose by 2 basis points (1bp=0.01%) to 4.349%. Bitcoin traded down 2.1% at $93,760.25.

President Trump hinted that negotiations with some trading countries could be concluded as early as this week. However, he signaled that an agreement with China, which the market is waiting for, would take time. Additionally, Trump's mention of a 100% tariff on foreign-produced films caused media companies like Netflix and Walt Disney to plummet by 1.9% to 2.5%.

Berkshire Hathaway's Class B shares plunged 5.8% following the announcement that Warren Buffett would hand over management to Vice Chairman Greg Abel by the end of the year while remaining as chairman. The Berkshire board decided that Warren Buffett would remain as chairman and Greg Abel would become CEO starting January 1, 2026.

Although the US employment figures for March, released last Friday, were better than expected, the results of Trump's tariff war have not yet been reflected. Market experts expect tariffs to disrupt supply chains and worsen consumer sentiment, ultimately slowing down the US economy.

Strategists led by Michael Wilson at Morgan Stanley stated that a trade agreement with China is a prerequisite for the US stock market to recover to record highs.

Chris Larkin of Morgan Stanley's E*TRADE said, "The S&P 500 has shown the strongest short-term momentum in the past 20 years, offsetting the tariff sell-off, but it's uncertain if it will lead to a new bull market."

With Trump's pressure on Chairman Powell and the Fed causing significant turmoil in the financial markets, bond traders are reducing bets on rate cuts. Trump reiterated that he has no intention of dismissing Chairman Powell but again demanded a rate cut, citing the absence of inflation.

As the US market remains robust, the Fed has a stronger justification to maintain the current rate freeze. Fed Chairman Jerome Powell and Fed governors welcome the recent slowdown in inflation but continue to monitor inflationary pressures from tariffs.

Guest Reporter Jung-A Kim kja@hankyung.com