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Auto stocks fall on latest Trump tariff shot

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Dollar up against Canadian dollar, Mexican peso

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Gold hits record high

(Updates to US market close)

By Chuck Mikolajczak

NEW YORK, March 27 (Reuters) - Global stocks fell for a

second straight session and gold hit a record high on Thursday

after the latest tariffs from U.S. President Donald Trump's

administration that expanded the trade war to autos.

Trump on Wednesday announced 25% tariffs on vehicles and

foreign-made auto parts imported into the United States. This

weighed on Japan's Nikkei and South Korea's KOSPI

.

Countries around the globe threatened retaliatory levies.

U.S. stocks oscillated between gains and losses while

automakers slumped, although electric vehicle makers Tesla

and Rivian climbed as their production is

located within the U.S.

General Motors ( GM ) tumbled 7.36%, while Ford lost

3.88%, reflecting concerns about the impact on their supply

chains. U.S.-listed shares of Stellantis ( STLA ) dipped 1.25%.

"Investors are really cautious and wary of Trump and his

policies. Even more than the policies, just the constant

flip-flopping," said Jed Ellerbroek, a portfolio manager at

Argent Capital in St. Louis, Missouri.

"That makes people really nervous to make long-term

investment decisions, whether we're talking about companies or

about investors."

The Dow Jones Industrial Average fell 155.09 points,

or 0.37%, to 42,299.70, the S&P 500 fell 18.89 points, or

0.33%, to 5,693.31 and the Nasdaq Composite fell 94.98

points, or 0.53%, to 17,804.03.

The major U.S. indexes are on track for their first

back-to-back monthly declines since the two-month period that

ended in October 2023.

European stocks closed lower, with weakness in shares of the

continent's top carmakers. Volkswagen was down 1.26%,

BMW was off 2.55% and Mercedes-Benz was

2.69% lower.

MSCI's gauge of stocks across the globe

fell 2.77 points, or 0.33%, to 843.19.

The pan-European STOXX 600 index fell 0.44% to

546.31, a two-week closing low.

Tariffs and their effect on the global economy, as well as

their potential to delay Federal Reserve rate cuts, have weighed

on stocks in recent weeks, though shares have shown signs of

stabilizing lately.

Reflecting investors' caution, spot gold was 1.26%

higher at $3,057.35 an ounce, after hitting a record $3,059.30.

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

against a basket of currencies, dipped 0.33% to 104.29, with the

euro up 0.4% at $1.0795.

Versus the dollar, the Mexican peso weakened 0.86% to

20.295 while the Canadian dollar softened 0.29% to C$1.43

as both countries are expected to be heavily impacted by the

auto tariffs.

Trump has announced plans to impose reciprocal tariffs on

all countries on April 2.

Canadian Prime Minister Mark Carney said on Thursday he

would respond with unspecified trade actions if Trump imposes

the new auto tariffs.

U.S. data showed the labor market remains on solid footing,

although the impact of Trump's tariff policy and the aggressive

cutting of federal workers by billionaire Elon Musk's Department

of Government Efficiency has yet to show an outsized impact.

Other data showed the economy grew at a slightly more solid

pace in the fourth quarter than previously estimated.

The benchmark U.S. 10-year Treasury note yield

rose 2.7 basis points to 4.365%. While the yield on the

seven-year note was higher after a soft auction of

$44 billion of the paper.

U.S. crude settled 0.39% higher at $69.92 a barrel

and Brent settled at $74.03 per barrel, up 0.33% on the

day, as investors assessed the ramifications of the latest

escalation in the trade war.