Market Volatility on High Alert as Trump Unveils Sweeping Policy Changes
Electric Vehicle Stocks Take a Hit
President Donald Trump’s latest policy announcements sent shockwaves through the market, with electric vehicle (EV) stocks taking a significant hit. Tesla Inc. plummeted as much as 4.7%, becoming the second-biggest weight on the S&P 500 Index, while the Bloomberg Electric Vehicles Index slid as much as 1.7%. EV startups Rivian Automotive Inc. and Lucid Group Inc. also felt the pinch.
The Reason Behind the Slide
Trump’s directive to consider removing EV subsidies and policies favoring the vehicles has sparked concerns about the future of the industry. Although the president didn’t explicitly order the Environmental Protection Agency to rewrite the rules, his move sets the stage for actions that could slow the adoption of EVs in the US.
Space Exploration Stocks Soar
On the other hand, space company stocks experienced a meteoric rise, with Intuitive Machines Inc. jumping as much as 23% to post its best day in months. Rocket Lab USA Inc. and Redwire Corp. also rode double-digit gains to record highs, buoyed by Trump’s promise to “pursue our manifest destiny into the stars” by landing American astronauts on Mars.
Tariff Tensions Simmer
Trump’s plans to impose 25% tariffs on Mexico and Canada by February 1 had a mixed impact on the market. Canadian energy and industrial stocks, such as Meg Energy Corp. and Athabasca Oil Corp., fell but still held onto part of their gains from Monday. Aircraft maker Bombardier Inc. slumped 6% on Tuesday after rising 7.2% in the previous session.
Cryptocurrencies Take a Breather
The cryptocurrency market remained relatively calm, with moves in cryptocurrencies and crypto-linked stocks fairly quiet after Trump’s first day lacked any significant policy moves to support digital assets. Bitcoin gained more than 3% and traded around $106,000.
Investors on High Alert
As Trump’s administration continues to unveil new policies, investors are closely watching for their impact on the market. JPMorgan Chase & Co. has established a “war room” to monitor the situation, while experts warn of increased volatility in the coming days. “This could increase volatility for a variety of financial markets,” said Walter Todd, president and chief investment officer at Greenwood Capital Associates.
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