(Bloomberg) — Tesla Inc. shares fell. On Tuesday, along with other electric vehicle manufacturers, space stocks saw big gains, after President Donald Trump announced a series of policies that could have wide-ranging impacts on markets.
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Specifically, Trump ordered his administration to consider eliminating subsidies for electric vehicles and policies that favor the vehicles, which has affected Elon Musk’s company. He also announced plans to impose 25% tariffs on Mexico and Canada by February 1, and pledged in his inauguration speech on Monday to land American astronauts on Mars.
“As we enter Trump 2.0, the market appears very sensitive and reactive to the new administration’s headlines,” said Walter Todd, president and chief investment officer at Greenwood Capital Associates. “This could lead to increased volatility in a variety of financial markets.”
Investors are closely watching Trump’s additional moves to assess their impact on the markets. JPMorgan Chase & Co. is creating a “war room” for precisely this purpose. It is not yet clear exactly how the policy proposals will proceed. For example, stocks of companies facing tariff risks are largely ignoring the threats at the moment.
One area that the new administration has yet to address is cryptocurrencies, leaving the industry waiting impatiently.
“We are seeing some selling the news in hot parts of the market like Tesla and cryptocurrencies that were priced for more ahead of the inauguration,” said Chris Murphy, co-head of derivatives strategy at Susquehanna International Group. “Even Chinese stocks, which benefited from Trump’s lack of anger, have mostly reversed and are now flat on the day following near-term profit taking.”
EV chip
Tesla stock fell as much as 4.7% and was the second-largest weight on the S&P 500 on Tuesday, while the Bloomberg Electric Vehicle Index fell as much as 1.7%, after Trump directed his administration to consider removing subsidies for electric vehicles and other policies that favor the vehicles. . Electric vehicle startup Rivian Automotive Inc. also declined. and Lucid Group Inc.
While Trump has not explicitly ordered the EPA to rewrite the rules, his guidance sets the stage for measures that could slow the adoption of electric vehicles in the United States.
Space stocks jump
Space company stocks jumped on Trump’s promise to “pursue our manifest destiny in the stars” by landing American astronauts on Mars.
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