To The Moon

Updates to U.S. morning trade

By Chuck Mikolajczak

NEW YORK, March 27 (Reuters) - Global stocks dipped and gold hit a record high on Thursday in the wake of U.S. President Donald Trump's latest tariffs that expanded the trade war to auto imports.

Trump announced 25% tariffs on all vehicles and foreign-made auto parts imported into the United States late on Wednesday, scheduled to take effect on April 3. This weighed on Japan's Nikkei <.N225> and South Korea's KOSPI .KS11 stock markets.

Countries around the globe threatened retaliatory tariffs.

U.S. stocks shook off initial declines and were roughly unchanged while automakers slumped. General Motors GM.N tumbled about 8%, while Ford F.N dropped more than 4%, reflecting concerns about the impact on their supply chains. U.S.-listed shares of Stellantis STLA.K fell about 3%.

"We believe that he's using (auto tariffs) as a trade negotiation. The markets are jittery because nobody really knows what's going to happen and what will come out in future," Nicolas Lin, chairman and interim CEO of Aether Holdings.

The Dow Jones Industrial Average .DJI rose 20.71 points, or 0.05%, to 42,478.39, the S&P 500 .SPX climbed 6.42 points, or 0.12%, to 5,718.66 and the Nasdaq Composite .IXIC advanced 21.25 points, or 0.09%, to 17,920.27.

European stocks fell, with weakness in shares of Europe's top carmakers such as Volkswagen VOWG.DE down nearly 2%, while BMW BMWG.DE lost almost 3% and Mercedes-Benz MBGn.DE slid more than 4%.

MSCI's gauge of stocks across the globe .MIWD00000PUS slipped 0.4 points, or 0.05%, to 845.48.

The pan-European STOXX 600 .STOXX index was down 0.5% after falling as much as 1.1% to a two-week low.

Euro zone bond yields dropped, with Germany's 2-year yield hitting its lowest since March 5 DE2YT=RR.

Tariffs and their effect on the global economy, as well as their potential to delay Federal Reserve rate cuts, have weighed on stocks in recent weeks, though they have shown signs of stabilizing lately.

Reflecting investors' caution, spot gold XAU= rose 1.07% to $3,051.69 an ounce, after hitting a record $3,057.75.

Goldman Sachs raised its gold price forecast on Wednesday to $3,300, citing stronger-than-expected exchange-traded fund inflows and sustained central bank demand.

The dollar index =USD, which measures the greenback against a basket of currencies, fell 0.2% to 104.43, with the euro EUR= up 0.24% at $1.0777.

The Mexican peso MXN= weakened 0.82% versus the dollar at 20.288 while the Canadian dollar CAD= weakened 0.39% versus the greenback to C$1.43 per dollar as both countries are expected to be heavily impacted by the tariffs.

On China, Trump said he may give Beijing some tariff reductions to get a deal done to sell TikTok, which helped Chinese shares outperform in Asian trading.

Trump has touted plans to impose reciprocal tariffs on all countries on April 2, which he dubbed "Liberation Day."

U.S. data showed the labor market remains on solid footing, although the impact of Trump's tariff policy and the aggressive cutting of federal workers by billionaire Elon Musk's Department of Government Efficiency has yet to show an outsized impact.

The benchmark U.S. 10-year note yield US10YT=RR rose 3.3 basis points to 4.371%.

U.S. crude CLc1 rose 0.3% to $69.86 a barrel and Brent LCOc1 increased to $73.89 per barrel, up 0.14% on the day, as investors assessed the ramifications of the latest escalation in the trade war.

(Reporting by Chuck Mikolajczak; Additional reporting by Pranav Kashyap and Johann M Cherian in Bangalore; Editing by Richard Chang)

((charles.mikolajczak@tr.com; @chuckmik.bsky.social))