Stocks dip as US imposes steel, aluminum tariffs; GM surges

U.S. stocks are down Thursday after the Trump administration announced that it will impose tariffs on steel and aluminum imported from Europe, Canada and Mexico.

That’s helping U.S. steel and aluminum companies, but hurting big machinery makers like Boeing and Caterpillar. Mexico announced tariffs on some U.S. goods in response.

The European Union has said it could put duties on products including peanut butter and orange juice, and household goods makers are suffering losses.

General Motors is surging after SoftBank of Japan said it will invest $2.25 billion in GM’s autonomous car business.

KEEPING SCORE: The S&P 500 index lost 5 points, or 0.2 percent, to 2,719 as of 11:45 a.m. Eastern time. The Dow Jones industrial average fell 151 points, or 0.6 percent, to 24,514.

The Nasdaq composite gained 24 points, or 0.3 percent, to 7,464 as technology companies like Alphabet and Facebook bucked the market’s decline and made gains. The

Russell 2000 index, which is made up of smaller companies that tend to do more business in the U.S., slipped 3 points, or 0.2 percent, to 1,644. It closed at a record high Wednesday.

Despite the old Wall Street saying “Sell in May and go away,” stocks are on track to finish higher this month. The S&P 500 is up 2.5 percent in May while the Nasdaq has jumped almost 6 percent and the Russell has advanced nearly 7 percent.

STEEL OR NO STEEL: President Donald Trump’s administration said tariffs on steel and aluminum imported from Europe, Canada and Mexico will go into effect Friday after failing to win concessions in talks. It proposed the tariffs earlier this year but delayed them to make time for negotiations.

U.S. Steel jumped 3.8 percent to $37.68 and Nucor gained 1.6 percent to $65.10. Aluminum producer Century Aluminum gained 4.3 percent to $17.89.

Mexico said it would penalize U.S. imports including pork bellies, apples, grapes, cheeses and flat steel. The EU has said it will put duties on imports from the U.S. including orange juice and peanut butter. Consumer goods makers took some of the worst losses on Thursday, as Jif maker Smucker lost 1.7 percent to $106.79. Consumer goods giant Procter & Gamble lost 1.9 percent to $73.44.

The EU has also said it could put tariffs on motorcycles, Levi’s jeans and Kentucky bourbon. Harley-Davidson lost 1.4 percent to $41.39.

STOCK IMPACT: Boeing dropped 1.2 percent to $353.92 and Caterpillar fell 1.5 percent to $153.15. Farm equipment maker Deere fell 2.4 percent to $151.34. The tariffs could increase the cost of the metals they use to make their products, and tariffs in Europe or other markets could hurt their sales.

GM = GET MONEY: GM said SoftBank is taking a 20 percent stake in the GM Cruise automated division, which values that business at about $11 billion. GM itself will invest another $1.1 billion in it to speed up large-scale deployment of self-driving robotaxis next year. General Motors stock jumped 10.1 percent to $41.65.

CONSUMER SPENDING: The Commerce Department said Americans boosted their spending by 0.6 percent in April while a gauge of inflation remained at the Federal Reserve’s optimal level for a second straight month. Consumer spending was a bit weak in the first quarter of this year and experts are predicting a rebound from April to June.

However discount retailers Dollar Tree and Dollar General both stumbled after they said inclement weather hurt their business in the first quarter of the year. Their results fell short of Wall Street projections and Dollar Tree cut its profit forecast for the year.

Dollar Tree fell 11.8 percent to $84.98 and Dollar General gave up 8.5 percent to $88.35.

DEUTSCHE BANK: Deutsche Bank skidded after the Wall Street Journal reported that the Federal Reserve determined the bank’s U.S. business is in “troubled condition,” a designation that pushed the bank to take fewer risks and requires it to get Fed approval before it hires or fires senior managers in the U.S. The stock lost 7.4 percent to $10.71.

ENERGY: U.S. crude oil slipped 0.9 percent to $67.57 a barrel in New York. Brent crude, used to price international oils, rose 1 percent to $78.52 per barrel in London.

BONDS: Bond prices edged higher. The yield on the 10-year Treasury note fell to 2.84 percent from 2.85 percent. Banks and financial companies traded lower. JPMorgan Chase declined 1.1 percent to $107.20 and Goldman Sachs lost 1.7 percent to $225.30.

CURRENCIES: The dollar fell to 108.70 yen from 108.85 yen. The euro slid to $1.1649 from $1.1654.

OVERSEAS: The DAX in Germany lost 1.7 percent and France’s CAC 40 fell 0.7 percent. The British FTSE 100 index lost 0.3 percent. The FTSE MIB in Italy fell 0.4 percent after a big gain on Wednesday.

In Spain, the IBEX 35 slumped 1.5 percent on reports conservative Prime Minister Mariano Rajoy is closer to being ousted after almost eight years in power. Rajoy faces a no-confidence vote and the lower house is debating whether to replace him with the leader of the Socialist opposition.

Asian stocks rose following big gains in the U.S. the day before. Japan’s Nikkei 225 index gained 0.8 percent and Hong Kong’s Hang Seng index jumped 1.4 percent. South Korea’s Kospi advanced 0.6 percent.

Contributing to those gains, a survey showed Chinese factory activity grew at its fastest rate in eight months on stronger demand.

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AP Markets Writer Marley Jay can be reached at http://twitter.com/MarleyJayAP His work can be found at https://apnews.com/search/marley%20jay