Markets dropped after Trump confirmed steep auto tariffs, dragging down car stocks and rattling global sentiment.

Gold hit a record high while the dollar swung sharply as traders reacted to trade tensions, economic data, and fresh Fed warnings about inflation risks.

Here are the headlines and asset price movements you may have missed in the last trading sessions:

Headlines:

• U.S. President Trump signs 25% auto import tariffs starting April 3, exempts parts for US-made vehicles
• Japan Chief Cabinet Secretary Yoshimasa Hayashi said that moves by the U.S. to restrict trade could have a “large impact on bilateral economic ties, the global economy and the multilateral trading system.“
• China’s Commerce Ministry announced Thursday that China has filed a WTO lawsuit against the U.S. over its additional tariff measure
• China Industrial Profits (YTD) for February 2025: -0.3% y/y (4.0% y/y forecast; -3.3% y/y previous)
• U.S. initial jobless claims for the week ending March 22: 224.0k (225.0k forecast; 223.0k previous)
• U.S. final GDP for Q4 2024: 2.4% q/q (2.3% q/q forecast; 3.1% q/q previous)
• U.S. pending home sales for February: 2.0% m/m (2.9% m/m forecast; -4.6% m/m previous); -3.6% y/y (-3.7% y/y forecast; -5.2% y/y previous)
• U.S. Goods trade deficit for February: $147.9B ($134.6B deficit forecast, $155.6B previous)
• U.S. Kansas Fed Manufacturing Index for March: 1.0 (-14.0 forecast; -13.0 previous)
• FOMC voting member Susan Collins said holding rates steady for longer is “appropriate”
• Canada PM Mark Carney: “We will fight the U.S. tariffs with retaliatory trade actions of our own“
• Mexico President Claudia Sheinbaum said her government will give a “comprehensive response” to Trump’s tariffs on April 3
• France President Macron on Trump’s tariffs: “Europeans will respond by reciprocating.“

Broad Market Price Action:

Dollar Index, Gold, S&P 500, Oil, U.S. 10-yr Yield, Bitcoin Overlay Chart by TradingView

Trump’s announcement of 25% tariffs on foreign-made cars and parts made waves for the major assets on Thursday. Trump declared the tariffs will remain in place throughout his 4-year term, with collection beginning April 3. The plan includes a tax deduction on interest payments for car loans if the vehicle is American-made, while exempting parts made in America but assembled into foreign cars.

Stock markets fell in response, with major U.S. indices all closing lower. Car companies were hit hardest – General Motors dropped over 7% and Ford fell nearly 4%, while Tesla managed a small gain since it makes most of its cars in America.

European markets had it even worse, especially in Germany where the auto sector is a big deal.

Investors seeking safety pushed gold prices to a record high of $3,060 per ounce before settling at $3,056. Some analysts believe gold could reach as high as $4,200 by year-end if trade tensions worsen. Bitcoin prices bounced around but stayed fairly steady near $87,000.

Oil prices inched up slightly to about $69.85 per barrel. Interest rates on government bonds also rose, with the 10-year Treasury yield reaching a one-month high near 4.40% before easing to 4.36% following the better-than-expected final U.S. GDP and pending home sales data.

FOMC voting member Susan Collins warned that these tariffs will likely increase prices for American consumers in the short term, which creates new challenges for the central bank as it manages inflation and economic growth.

FX Market Behavior: U.S. Dollar vs. Majors:

Overlay of USD vs. Major Currencies Chart by TradingView

The U.S. dollar bounced all over the charts as traders reacted to Trump’s auto tariff announcement and a string of economic reports.

The dollar initially dropped during Asian trading as markets digested Trump’s new 25% tariff on foreign-made vehicles. It then found its footing during European hours as investors reassessed the implications of the protectionist measures.

When strong U.S. economic data hit the wires in the U.S., the Greenback shot up broadly except against CHF. The final Q4 GDP reading came in at 2.4% (better than the 2.3% expected), weekly jobless claims remained low at 224,000, and pending home sales jumped 2.0% in February after hitting record lows.

Near the London close, the dollar took a sudden dive, possibly as traders positioned themselves ahead of the U.S. core PCE reports and trading partners like Canada, Mexico, and the EU hinted at retaliatory tariffs.

Later, Fed official Susan Collins warned that tariffs would “inevitably” push inflation higher in the short term. Her comments put pressure on the dollar as traders worried about what this might mean for interest rates amid growing trade tensions.

Upcoming Potential Catalysts on the Economic Calendar:

• U.K. retail sales at 7:00 am GMT
• U.K. current account at 7:00 am GMT
• U.K. final GDP at 7:00 am GMT
• U.K. goods trade balance at 7:00 am GMT
• Germany GfK consumer climate at 7:00 am GMT
• U.K. Nationwide HPI from March 28 to April 3
• France consumer spending at 7:45 am GMT
• France prelim CPI at 7:45 am GMT
• Switzerland KOF economic barometer at 8:00 am GMT
• Spain flash CPI at 8:00 am GMT
• Germany unemployment change at 8:55 am GMT
• Canada monthly GDP at 12:30 pm GMT
• U.S. core PCE price index at 12:30 pm GMT
• U.S. personal income and spending at 12:30 pm GMT
• Germany Bundesbank President Nagel to speak at 1:00 pm GMT
• U.S. revised UoM consumer sentiment at 2:00 pm GMT
• U.S. revised UoM inflation expectations at 2:00 pm GMT
• U.S. FOMC member Barr to give a speech at 4:15 pm GMT
• U.S. FOMC member Bostic to give a speech at 7:45 pm GMT

The European session is packed with high-impact U.K. data and eurozone inflation figures, which could spark volatility in GBP and EUR pairs, especially with traders still trying to gauge central bank policy paths.

In the U.S., all eyes will be on the core PCE release – the Fed’s preferred inflation gauge – at 12:30 pm GMT. Later, Fed speak and consumer sentiment updates could sway expectations for rate cuts and drive dollar and equity price action.

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