The "Storm" of Trump's Auto Tariffs Hits: U.S. Tech Stocks Plunge while Berkshire Hathaway Rises Against the Trend

On March 26th local time, the U.S. stock market was like being hit by a strong "storm", with the three major indexes closing down collectively. The Nasdaq dropped 372.85 points, a decline of 2.04%; the S&P 500 index closed down 1.12%; and the Dow Jones Industrial Average fell relatively less, by 0.31%. The "ignition fuse" for this significant slump in U.S. stocks was precisely Trump's announced auto tariff policy. This policy also made technology stocks the hardest-hit area. However, Berkshire Hathaway managed to rise against the trend in the midst of the bleak market, with its share price breaking through the $800,000 mark, reaching a new all-time high.

On that day, Trump signed an executive order at the White House, announcing a 25% tariff on all imported cars, and the relevant measures will come into effect on April 2nd and will be permanently implemented. Cars manufactured in the United States will be exempt from this tariff. The White House spokesperson further stated that the 25% tariff will apply to imported passenger cars, light trucks, and key auto parts. Auto parts that comply with the United States-Mexico-Canada Agreement (USMCA) will continue to be exempt from tariffs. This news was like a heavy bomb that instantly shattered market sentiment. Not only did U.S. auto stocks collectively "collapse", but super-large-cap technology stocks also took a nosedive, triggering a significant decline in U.S. stocks.

In the technology stock sector, NVIDIA and Tesla led the decline. NVIDIA fell by 5.74%, with its market value evaporating by $169.1 billion overnight, approximately equivalent to 1.2291 trillion yuan; Tesla fell by 5.58%, with its market value evaporating by $51.7 billion, approximately equivalent to 376 billion yuan. In addition, Intel and Google fell by more than 3%, while Amazon, Meta, Netflix, etc. fell by more than 2%, Microsoft fell by more than 1%, and Apple also saw a slight decline. The reason why the auto tariff policy has such a severe impact on technology stocks is that technology companies are closely connected to the global supply chain. Take Tesla as an example, it has factories and supply chain systems in many places around the world. The substantial increase in tariffs will undoubtedly increase production costs, compress profit margins, and thus dampen investors' confidence in technology stocks.

It is worth noting that while the U.S. stock market was in a state of general decline, Berkshire Hathaway's Class B shares, under Buffett's umbrella, rose nearly 1%, continuing to reach a new closing all-time high. The share price of Berkshire Hathaway - A even broke through the integer mark of $800,000 per share during intraday trading. Berkshire's ability to rise against the trend is closely related to its unique investment strategy and diversified business layout. Berkshire has a wide-ranging investment portfolio that covers multiple industries such as insurance, energy, and consumer goods. This diversified investment effectively spreads risks and reduces the impact of a single policy or market fluctuation on the company. In addition, Buffett has long adhered to the value investment philosophy, focusing on investing in companies with stable cash flows and strong competitive advantages, enabling Berkshire to maintain stable performance even during periods of market turmoil.

In addition to the auto tariff policy, many unfavorable factors have also exerted tremendous pressure on the U.S. stock market. There are negative signals from the U.S. economy. U.S. consumer confidence has declined for four consecutive months, dropping below the relatively stable range since 2022. Moody's issued a warning about the U.S. fiscal outlook, stating that the "fiscal strength of the United States is in a period of continuous decline over many years", and trade tariffs may hinder the United States' ability to cope with the increasing debt burden and higher interest rates. Federal Reserve Chicago Fed President Austan Goolsbee warned that if U.S. bond market investors start to anticipate higher inflation, it will constitute a "major danger signal" and disrupt the Federal Reserve's interest rate cut plan. In addition, the U.S. Congressional Budget Office warned that the Treasury Department may face the risk of payment default as early as August.

This significant slump in U.S. stocks is the result of the combined effect of multiple factors. Trump's auto tariff policy has intensified market concerns about trade tensions, and technology stocks have been the first to bear the brunt of the impact. Berkshire's rise against the trend highlights the importance of value investment and diversified layout. In the future, the U.S. stock market will still face many uncertainties. Investors need to closely monitor changes in the global political and economic situation and make investment decisions carefully.