Dow, S&P 500, Nasdaq futures drop after Trump announces 25% tariffs on car

US stock futures dropped after President Trump signed an executive order imposing 25% tariffs on car imports.

Futures attached to the Dow Jones Industrial Average (YM=F) and the benchmark S&P 500 (ES=F) fell 0.3%. Futures attached to the tech-heavy Nasdaq Composite (NQ=F) tumbled 0.4%.

Trump announced the new duties from the Oval Office on Wednesday, saying they would “spur growth like you’ve never seen before.” The tariffs on foreign cars are set to begin April 2, the same day that reciprocal tariffs are set take effect.

Wall Street, however, so far does not seem convinced that new tariffs are an unassailable good for the economy. Stocks fell on Wednesday in anticipation of Trump’s announcement, and they have dipped throughout the month when the president has presented a hardline stance on what’s to come in the trade war.

At the Oval Office, Trump chimed in again on upcoming reciprocal levies. “We’re going to be very fair, we’re going to be very nice,” the president said, adding “we’re going to keep it somewhat conservative.”

However, as the auto tariffs were unveiled, reports emerged that negotiations between the EU and US on reciprocal duties had made little headway, and the EU is bracing for the announcement of a double-digit tariff rate across the bloc next week.

Investors will get a fresh look at inflation on Friday, with the release of February’s Personal Consumption Expenditures Index, the Federal Reserve’s preferred inflation gauge.

Investors remain worried that the US economy could buckle if Trump’s new levies exacerbate sticky inflation and slowing economic growth.

Fed Chair Jerome Powell recently reassured markets that rising prices from Trump’s tariffs are expected to be “transitory,” but his stance has raised questions from Fed watchers and, more recently, a central bank policymaker.