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After Trump's latest tariffs, stocks drop and gold hits a record.

Gold and global stocks both hit record highs on Thursday, following the latest tariffs imposed by U.S. president Donald Trump that extended the trade war into auto imports.

Trump announced late Wednesday that 25% of all imported vehicles and auto parts made abroad would be subject to tariffs. These are scheduled to go into effect on April 3rd. The Nikkei and KOSPI stock exchanges in Japan and South Korea were affected by this.

The world is a big place.

threatened

Tariffs in retaliation

U.S. stock prices recovered from initial losses and remained roughly unchanged, while automakers plunged. Ford and General Motors both dropped by more than 4%. This was due to concerns over the impact of their supply chains. Stellantis' shares listed in the United States fell by about 3%.

"We think he is using auto tariffs as a tool for trade negotiations." "The markets are jittery, because no one knows what is going to happen or what will be revealed in the future," Nicolas Lin said.

The Dow Jones Industrial Average rose by 20.71 points or 0.05% to 42,478.39. The S&P 500 gained 6.42 points or 0.12% to 5,718.66. And the Nasdaq Composite increased 21.25 points or 0.09% to 17,920.27.

European stocks dropped, with shares of Europe's leading carmakers like Volkswagen falling nearly 2%. BMW also lost almost 3%, and Mercedes-Benz fell more than 4%.

The MSCI index of global stocks fell 0.4 points or 0.05% to 845.48.

The pan-European STOXX 600 Index was down by 0.5%, after having fallen as high as 1.1% and reaching a two-week-low.

The yields on euro zone bonds fell, with Germany's two-year yield reaching its lowest level since March 5.

In recent weeks, the stock market has been impacted by tariffs, their impact on global economic growth, and their potential to delay Federal Reserve interest rate cuts. However, they have recently shown signs of stabilization.

Spot gold, reflecting investors' caution rose by 1.07%, to $3,051.69 per ounce after reaching a record of $3,057.75.

Goldman Sachs raised its gold price forecast on Wednesday to $3,300, citing stronger-than-expected exchange-traded fund inflows and sustained central bank demand.

The dollar index (which measures the greenback in relation to a basket of currencies) fell by 0.2%, reaching 104.43. Meanwhile, the euro rose 0.24%, at $1.0777.

Both countries will be affected by tariffs. The Mexican peso fell 0.82% against the dollar to 20.288, while the Canadian dollar dropped 0.39% to C$1.43 versus greenback.

Trump has said that he might give Beijing some tariff cuts to reach a deal to sell TikTok. This app helped Chinese stocks outperform Asian trading.

Trump announced plans to impose tariffs in return on all countries, on April 2, a day he called "Liberation Day."

The U.S. labor market is still on solid ground, despite the Trump tariff policy and aggressive cuts of federal employees by Elon Musk’s Department of Government Efficiency.

The yield on the benchmark U.S. 10 year note rose by 3.3 basis points, to 4.371%.

U.S. crude oil rose 0.3%, to $69.86 per barrel. Brent increased to $73.89 a barrel, an increase of 0.14% for the day as investors assessed the implications of the latest escalation of the trade war.

(source: Reuters)