The global stock market has recently been rocked by new tariffs announced by President Donald Trump, shaking up investor sentiment and adding uncertainty to an already volatile landscape. Among the companies feeling the impact is Tesla, which has experienced both an uptick in its stock price followed by setbacks, as traders react to the broader implications of the tariffs. Here’s a closer look at how these tariffs are affecting the markets and why Tesla is at the center of the storm.
The Market Reacts: A Mixed Bag of Gains and Losses
The stock market began the week strong, but quickly reversed course after President Trump’s announcement of new tariffs on automobiles. By the end of the week, futures contracts for major indices like the Dow Jones, S&P 500, and Nasdaq were all trending downward, with a particularly sharp decline in tech stocks. The Nasdaq was hit hardest, plunging by over 1.6% as investors grew wary of the potential long-term effects of the tariffs.
One sector that’s particularly vulnerable to these tariffs is artificial intelligence and tech hardware, where companies like Nvidia saw their stocks drop due to the added pressure from new trade restrictions. Nvidia, for example, is already grappling with Chinese restrictions on its chips, further complicating its growth prospects. Similarly, a lackluster IPO from CoreWeave, backed by Nvidia, added to the unease in the tech market.
Amidst this turmoil, Tesla has managed to break its long streak of weekly losses, only to fall back after hitting resistance at a key price point. The company’s stock surged by 6% last week, climbing to $263.55, but it remains far below its peak of $291.85. Since the start of 2025, Tesla’s shares have plummeted by 34.7%, making it one of the biggest losers in the S&P 500.
Trump’s New Tariffs: A Looming Threat for Automakers
On April 2, President Trump is set to unveil reciprocal tariffs aimed at counteracting the tariffs and trade barriers imposed by other countries on U.S. products. While the exact details are still unclear, reports suggest that Trump is prepared to take drastic action, which could have a significant impact on industries across the board.
For Tesla and its competitors, the timing of these tariffs could not be worse. Already, Trump’s 25% tariffs on automobiles, which were announced in late March, are set to go into effect on April 3. Additionally, a month-long suspension of tariffs on Canadian and Mexican goods is expected in early April. These developments add to the uncertainty surrounding Tesla’s operations, especially as it competes with other electric vehicle manufacturers from China and Europe.
Tesla isn’t the only automaker feeling the heat. The tariffs are likely to affect a range of industries, from copper and lumber to pharmaceuticals and other materials. The imposition of these tariffs has already led to threats of retaliation from trading partners, including Europe, which is considering imposing its own restrictions on high-margin U.S. services, particularly American tech giants.
Tesla’s Delivery Numbers and Stock Performance
Amid the ongoing trade drama, all eyes are on Tesla’s first-quarter delivery numbers, which are expected to be announced on April 2. According to analysts, Tesla is expected to deliver 412,000 electric vehicles in the first quarter, a modest increase from the 386,810 vehicles delivered during the same period last year. However, some estimates place deliveries between 355,000 and 380,000 units, which would mark a slowdown compared to previous quarters.
Tesla’s stock surged last week in anticipation of the delivery report, but it has since fallen back, reflecting the uncertainty caused by the tariffs. The company’s stock has dropped significantly since the beginning of 2025, raising concerns about the future of the electric vehicle market.
Tesla is not the only company in the electric vehicle space facing challenges. Rivals like XPeng, Li Auto, Nio, and Zeekr are also dealing with the fallout from the tariffs, with many of these stocks suffering heavy losses. BYD, a Chinese automaker that produces both vehicles and batteries, has seen slight gains, although it, too, faces the same headwinds.
How the Markets Are Reacting to Tariff Announcements
While the stock market is clearly rattled by Trump’s new tariffs, the long-term impact remains uncertain. The initial market response to the tariff announcement has been mixed, with some growth stocks seeing a brief rally, only to quickly turn negative as reality sets in. For example, Palantir and Rubrik, two companies that saw gains early in the week, ended up losing ground by the end of the trading session.
In the broader market, defensive stocks have fared relatively well, but few have made substantial progress. Treasury yields have remained steady, with the 10-year Treasury hovering around 4.25%, while crude oil prices have seen a modest rise. However, the S&P 500 and Nasdaq are both below their 200-day moving averages, signaling a possible downturn in the near future.
For investors, it’s a time to be cautious. With major indices below key technical levels, many are opting to hold cash and wait for the market to stabilize. However, some are staying optimistic and are prepared to act if the market shows signs of recovery.
Conclusion: A Bumpy Road Ahead for Tesla and the Markets
The new tariffs announced by President Trump have sent shockwaves through the market, creating uncertainty for Tesla and other automakers. As the situation develops, the implications of these tariffs could reshape the competitive landscape for the electric vehicle industry, especially as Tesla faces increased pressure from international competitors.
While Tesla’s delivery numbers remain a key focus for investors, the broader market is still trying to find its footing. With global trade tensions and potential retaliation measures looming, it’s clear that the road ahead for Tesla—and the broader market—could be bumpy. As always, investors will need to stay vigilant and adaptable as they navigate this uncertain terrain.
