Stocks dip, gold hits record, after Trumps latest tariff salvo

Auto stocks fall on latest Trump tariff shot

Dollar up against Canadian dollar, Mexican peso

(Updates to U.S. morning trade)

NEW YORK, March 27 (Reuters) –

Global stocks dipped and gold hit a record high on Thursday in the wake of U.S. President Donald Trump’s latest tariffs that expanded the trade war to auto imports.

Trump announced 25% tariffs on all vehicles and foreign-made auto parts imported into the United States late on Wednesday, scheduled to take effect on April 3. This weighed on Japan’s Nikkei and South Korea’s KOSPI stock markets.

Countries around the globe

U.S. stocks shook off initial declines and were roughly unchanged while automakers slumped. General Motors tumbled about 8%, while Ford dropped more than 4%, reflecting concerns about the impact on their supply chains. U.S.-listed shares of Stellantis fell about 3%.

“We believe that he’s using (auto tariffs) as a trade negotiation. The markets are jittery because nobody really knows what’s going to happen and what will come out in future,” Nicolas Lin, chairman and interim CEO of Aether Holdings.

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

European stocks fell, with weakness in shares of Europe’s top carmakers such as Volkswagen down nearly 2%, while BMW lost almost 3% and Mercedes-Benz slid more than 4%.

MSCI’s gauge of stocks across the globe slipped 0.4 points, or 0.05%, to 845.48.

The pan-European STOXX 600 index was down 0.5% after falling as much as 1.1% to a two-week low.

Euro zone bond yields dropped, with Germany’s 2-year yield hitting its lowest since March 5.

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 they have shown signs of stabilizing lately.

Reflecting investors’ caution, spot gold rose 1.07% to $3,051.69 an ounce, after hitting a record $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 against a basket of currencies, fell 0.2% to 104.43, with the euro up 0.24% at $1.0777.

The Mexican peso weakened 0.82% versus the dollar at 20.288 while the Canadian dollar weakened 0.39% versus the greenback to C$1.43 per dollar as both countries are expected to be heavily impacted by the tariffs.

On China, Trump said he may give Beijing some tariff reductions to get a deal done to sell TikTok, which helped Chinese shares outperform in Asian trading.

Trump has touted plans to impose reciprocal tariffs on all countries on April 2, which he dubbed “Liberation Day.”

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.

The benchmark U.S. 10-year note yield rose 3.3 basis points to 4.371%.

U.S. crude rose 0.3% to $69.86 a barrel and Brent increased to $73.89 per barrel, up 0.14% on the day, as investors assessed the ramifications of the latest escalation in the trade war.

(Reporting by Chuck Mikolajczak; Additional reporting by Pranav Kashyap and Johann M Cherian in Bangalore; Editing by Richard Chang)