US STOCKS-Wall St falls as Trump tariff uncertainty prevails

By Pranav Kashyap and Johann M Cherian

March 26 (Reuters) - Wall Street's main stock indexes fell on Wednesday, dragged down by megacap stocks, as investors awaited clearer guidance on the Trump administration's forthcoming tariffs expected to be enacted next week.

In the latest development, a report said U.S. President Donald Trump is readying an announcement on auto levies as soon as Wednesday.

Auto stocks such as Tesla TSLA.O fell 5%, while General Motors GM.N and Ford F.N were marginally lower.

The uncertainty regarding the scale of U.S. tariffs, the possibility of retaliatory measures from trading partners, and the potential ripple effects on the global economy and businesses have kept investors on edge over the past month.

However, investors also anticipated that Trump could soften his stance after he hinted that not all tariffs would be imposed by the April 2 deadline, with potential exemptions for certain countries—though the details remain unclear.

This provided a degree of stability to Wall Street over the past two sessions, with the major indexes reaching two-week highs. The S&P has climbed over 4% since its mid-March lows, while the Nasdaq has surged approximately 6%.

"The market is now on hold. (Trump's softened tariff stance) seems to have made a temporary relief," said Peter Cardillo, chief market economist at Spartan Capital Securities.

Investors "are going to be sensitive to tariffs ... the White House keeps changing its position, creating uncertainty."

Heavyweight growth stocks dragged the S&P 500, with Nvidia NVDA.O off 5.5% and Alphabet GOOGL.O dropping 1.5%.

At 12:19 p.m. ET, the Dow Jones Industrial Average .DJI fell 41.28 points, or 0.10%, to 42,543.18, the S&P 500 .SPX lost 50.12 points, or 0.87%, to 5,726.53 and the Nasdaq Composite .IXIC lost 306.28 points, or 1.68%, to 17,965.85.

Six of the 11 S&P 500 sectors edged higher, led by energy's .SPNY 0.9% rise. Crude prices climbed as investors priced in tighter global supply following the U.S. threat of tariffs on nations buying Venezuelan oil. O/R

Reflecting the cautious sentiment, a survey revealed a decline in optimism among top business executives in the first quarter.

In anticipation of tariff-induced price hikes, businesses scrambled to build up inventories. Data showed that orders for durable U.S. manufactured goods saw an unexpected increase last month.

Further contributing to market unease, Barclays revised its S&P 500 target downward to 5,900 points from 6,600. Earlier this month, both the S&P 500 .SPX and the Nasdaq .IXIC had tumbled 10% from their respective record highs — a phenomenon known as a correction.

The main focus of this week will be the personal consumption expenditures price index - the Federal Reserve's favored inflation gauge - due on Friday.

Minneapolis Fed President Neel Kashkari said he's uncertain about the effect of Trump's tariffs, with the possibility that they could push up prices arguing for higher interest rates.

Dollar Tree DLTR.O rose 5.3% after the discount-retail chain said it is nearing a sale of its Family Dollar business to a consortium of private equity investors for about $1 billion.

Excluding the Family Dollar banner, the company reported quarterly net sales marginally higher than the previous year's figure.

GameStop GME.N jumped 13.7% following its board's unanimous approval to incorporate bitcoin as a treasury reserve asset.

Declining issues outnumbered advancers by a 1.76-to-1 ratio on the NYSE and by a 2.01-to-1 ratio on the Nasdaq.

The S&P 500 posted 15 new 52-week highs and two new lows, while the Nasdaq Composite recorded 29 new highs and 137 new lows.