The New York Stock Exchange opened with a slight gain, watching the fallout from President Donald Trump's announcement on imported car tariffs the previous day. The possibility of a global trade war sparked risk-averse sentiment, but rising real economy indicators supported the market.
As of 10:30 a.m. local time on the 27th, the Dow Jones Industrial Average, a group of blue-chip stocks, recorded a rise of 19.11 points (0.05%) to 42,473.90 on the New York Stock Exchange (NYSE). The large-cap benchmark S&P 500 index rose by 5.39 points (0.09%) to 5,717.59, while the technology-focused Nasdaq Composite Index showed a rebound of 13.54 points (0.08%) to 17,912.56.
The three major indexes, which all closed down the previous day, slipped after three consecutive trading days of gains. Prior to President Trump's announcement on car tariffs, heightened caution particularly led to weakness in big tech stocks, with the Nasdaq index dropping by 2.04%, falling to a level 11.41% below its peak of 20,204.58 within just two trading days after exiting the correction zone (more than 10% below the peak) that it had been in for two weeks. The Nasdaq index is currently about 11% lower than its peak.
President Trump signed an executive order the previous day imposing a 25% tariff on all cars that are not made in the United States. This follows the imposition of a 25% tariff on steel and aluminum products that took effect on the 12th. The new measure will take effect at midnight on the 3rd of next month.
The White House expects that the imported car tariffs will bring in an additional $100 billion in tax revenue annually.
Among the major tech stock group known as the 'Magnificent 7' (M7), Microsoft, Apple, Tesla, Amazon, and Meta (the parent company of Facebook) opened with gains, while Nvidia and Alphabet (the parent company of Google) started lower.
Most of the M7 stocks that had plummeted the previous day remained flat, but Tesla's stock price surged more than 5%. Tesla, which assembles and produces all of its sales vehicles in the United States, is expected to benefit from the car tariffs.
Nvidia's stock faced weakness due to pressure from U.S. government export controls on high-tech semiconductors to China, as well as environmental and energy regulatory pressures from the Chinese government.