Tesla, Apple Lead Bulls but Market Churns Over Auto Tariffs

The market churned on Thursday as investors contemplated the impact of tariffs on the automobile industry. The tariff news was not unexpected, so much of it had already been priced into the market. However, this isn’t the end of the tariff store. There will be a barrage of moves next week, and there is a great likelihood that Canada will impose some harsh counter-tariffs.

Tesla TSLA and Apple AAPL helped the bullish cause, but the breadth was slightly negative, and over 300 names hit new 12-month lows. Speculative trading remains suppressed, and interest rates have ticked higher.

There was nothing particularly meaningful about Thursday’s action. It was a function of uncertainty about what will happen next. There is some hope that the stock has already priced in much of the tariff carnage, but since we don’t have any clue what President Trump will do, it is hard to feel comfortable that the news is already fully discounted.

PCE inflation news will be released on Friday morning and will be of particular interest. A hot report that indicates inflation is sticky will trigger worries about stagflation. There are already some concerns building, and if inflation is holding up while the economy softens, that will be an issue. I’ll have more on this in the morning.

Technically, nothing changed on Thursday. There is still a substantial number of broken charts with some support at the lows that were hit last week. If last week’s lows are tested, there is a strong likelihood they will not hold, and the downtrend will gain velocity.

I’d like to be more positive about the market, but until we see better price action, the best course of action is to protect capital and stay patient.

Have a good evening. I’ll see you tomorrow.

At the time of publication, DePorre had no positions in any securities mentioned.