📉 What Happened?
General Motors’ latest earnings report showed tariffs sliced $1.1 billion from second-quarter profit, driving a 32% year-over-year drop in core earnings to $3 billion on $47.1 billion in revenue. The Detroit giant reaffirmed that U.S. trade duties could cost $4-5 billion for all of 2025 and said the third quarter will feel “even more pronounced” pressure.
📊 Market Reaction
GM stock today slumped 7% in early New York trading to about $49.30—its worst single-day slide since March—after falling more than 3% in pre-market action. Volatility spiked as options volume ran seven times the usual pace, with puts in heavy demand, underscoring investor angst over tariff fallout.
🔎 Expert Take
“Tariff pressures and weakening consumer sentiment will keep GM shares under pressure,” warned Bernstein analyst Daniel Roeska, who cut his rating to Underperform and slashed his price target to $35.
RBC Capital’s Tom Narayan struck a more resilient tone: “Even with the tariff headwind, valuation remains attractive; our $55 target assumes GM mitigates roughly 30% of the cost through pricing and manufacturing moves”.
📉 Street Sentiment
The split views leave Wall Street leaning cautious. Bulls point to GM’s 17.4% U.S. market share and steady truck demand, while bears fear additional policy shocks and squeezed margins. Short-term options skew shows a pronounced put bias, signaling traders are bracing for further downside.
💡 Investor Insight
For retail investors, the takeaway is hold with caution. Tariff headlines are likely to dominate near-term price swings, but GM’s pledge to localize production and its 1% dividend yield offer a floor for patient holders. Until Washington provides clarity—or GM proves it can offset at least one-third of the duty bill—fresh buying looks premature, while outright selling risks locking in a panic low. In other words: monitor policy moves, keep positions sized, and wait for confirmation before shifting gears.
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