(Reuters) – Shares of automakers and megacap tech stocks bore the brunt of a wider equity pullback on Monday after U.S. President Donald Trump ordered sweeping tariffs against Mexico, Canada and China, sparking fears of a global trade war that could hit growth.
Investors flocked to the dollar and U.S. Treasuries, as Mexico and Canada, the top two U.S. trading partners, vowed retaliatory levies, while China said it would challenge Trump’s tariffs at the World Trade Organization.
Among carmakers, shares of General Motors slid 6.4%, Ford dropped 3.8% and Tesla shed 2.9% in premarket trading. U.S.-listed shares of e-commerce firms including PDD Holdings declined 4.5%, while Alibaba lost 1.9%.
Heavyweight Big Tech stocks dropped, with Microsoft down 1.5%, Apple shedding 1.9% and Amazon 2.3% lower. A 2.2% slump in Russell futures pointed to sharp declines for domestically focused stocks.
“Beyond the rising cost of moving goods across borders, it will disrupt established supply-chains and depress North American business sentiment,” Bruce Kasman, chief economist for J.P.Morgan, said in a note.
Trump acknowledged that tariff costs are sometimes passed along to consumers and said his plans might cause a short-term disruption. He also said something “very substantial” was planned for tariffs against the European Union.
Crypto stocks dropped, with exchange Coinbase down 5.8% and miners Marathon Digital and Riot Platforms shedding about 6% each, as investors’ flight to safety pushed bitcoin below the $100,000 mark.
“This weekend’s actions challenge our underlying view that the Trump administration will strive to limit disruptive policies as it balances its desire to reduce engagement with the world with a commitment to support US businesses,” Kasman said.
“The risk is that the policy mix is tilting (perhaps unintentionally) into a business-unfriendly stance.”
(Reporting by Medha Singh in Bengaluru; Editing by Pooja Desai)
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