What’s News in Markets: Tariffs Hit Automakers, Lululemon’s Warning, Family Dollar Sale

3.063 - 25.116 Jack Pitcher

Hey, listeners. It's Saturday, March 29th. I'm Jack Pitcher for The Wall Street Journal. And this is What's News in Markets, our look at the biggest stock moves of the week and the news that drove them. Let's get to it. March Madness is here and not just on the basketball court. Investors had to confront two of their toughest opponents this week, tariffs and inflation.

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On Wednesday, President Trump said he would impose 25% tariffs on all vehicles imported to the US beginning on April 3rd. That's Thursday of the coming week. And Trump is expected to unveil more trade actions next week too. Stocks gave up earlier gains and car makers got hit especially hard. Then on Friday, trading turned ugly.

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New inflation data for February came in slightly higher than forecast, adding to fears that tariffs could stoke inflation and slow the economy at the same time. Consumer sentiment also soured, a bad sign for consumer spending. All three major indexes were heading for weekly gains before Friday's trading wiped them out.

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For the week, the S&P 500 dropped 1.5%, the Dow fell 1%, and the Nasdaq tumbled 2.6%. First up, let's talk about the automakers. Tariff worries have already taken their toll on shares. Even so, some of the biggest US car companies took the latest announcement on the chin this week. That's because the impact will be broad.

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S&P Global Mobility data says nearly half of new passenger vehicles sold in the US last year were assembled outside the country. Wedbush securities analysts called the tariffs a, quote, hurricane-like headwind to foreign and many U.S. automakers, unquote. And that could push up the average price of a car sold in the U.S. by as much as $10,000.

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General Motors shares have dropped 8% since the tariffs were announced. Shares of foreign car companies like Toyota, Mercedes-Benz, and BMW also sank. Tesla, which builds all of its U.S. sold cars domestically, took less of a hit. But Chief Executive Elon Musk said his company won't be unscathed since the price of parts from other countries will rise.

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Tesla shares are off 3% since the announcement. Now let's circle back to those consumer confidence concerns. It isn't just survey data that's spooking investors. Let's take Lululemon. It makes high-end leggings and other workout gear. Even I had a pair of their shorts in college.

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The consumer favorite reported stronger than expected fourth quarter results late Thursday, including $3.6 billion in revenue, but its shares tanked on Friday. That's because the company said consumers are being cautious, and that's likely to hurt sales this year. Chief Executive Calvin McDonald said consumers are worried about inflation and the economy, and they're spending less.

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At Lululemon, store traffic slowed in the first quarter. Lululemon shares were the worst performer in the S&P 500 on Friday, dropping 15%. Dollar Tree is selling off part of its business, and that was great news for the stock. The discount retail chain said Wednesday that it agreed to sell its Family Dollar business to private equity investors for roughly $1 billion.