More Trump Tariffs Cause Stocks to Skid
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Welcome to the Schwab Market Update podcast, where we prepare you for each trading day with a recap of recent news and a look at what's ahead. I'm Keith Lansford, and here is Schwab's early look at the markets for Thursday, March 27th. Stocks hope to rekindle some of Monday's fire after Wednesday's sell-off. Stocks fell on Wednesday on the news that President Trump was set to announce new automotive tariffs after the market close.

St. Louis Fed President Alberto Musilam said that the Federal Reserve may wait on rate cuts because there's a higher risk that inflation could stall above the Fed's 2% target or even move higher. He noted that rising tariffs could add to inflation risks.

Tariffs continue to be a dark cloud over the markets, but the sky may clear up next week when the tariffs finally go into effect on April 2nd because there should be clarity on who and what is getting targeted.

The White House has been sending mixed signals, observed Michael Townsend, managing director of the Legislative and Regulatory Affairs at Schwab, first saying that they would be imposed on all countries, then more recently saying they will initially focus on 10 to 15 countries with which the U.S. has a big trade deficit. The plan also was to announce tariffs on automobiles, pharmaceuticals and semiconductors next week, but those reportedly will be delayed.

The uncertainty is driving companies and investors crazy. Optimism over increased stimulus is likely to support more gains for European stocks, even as declines in companies with a high share of U.S. sales leaves them on course for a monthly decline, said Jeffrey Kleintop, chief global investment strategist at the Schwab Center for Financial Research. The stock's 600 has outperformed the S&P 500, despite underperforming luxury and autos groups.

Harding's downgrades on autos are unlikely to reverse until there's more clarity on U.S. import tariffs. It isn't just Europe. Automakers are also the worst-performing industry group in the S&P 500 this year. The prospect of German stimulus can return as a key driver in the longer term, continued Kleintopf, especially as economic data continue to show improvement.

Bitcoin futures topped out around the first of the year and fell more than 26% by March 10th. Recently, Bitcoin has moved upward, creating what many technical analysts would call a rising wedge. The rising wedge price pattern is usually considered to be bearish. If the pattern plays out, the downtrend in Bitcoin could continue.

The S&P 500 index fell 64.45 points or 1.12% to 5,712.20. The Dow Jones Industrial Average tumbled 132.71 points or 0.31% to 42,454.79. Finally, the Nasdaq Composite dropped 372.84 points or 2.04% to 17,899.01.

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