Investing.com-- U.S. stock index futures fell on Wednesday evening after President Donald Trump said he will impose tariffs on automobile imports, while technology stocks sank on some doubts over artificial intelligence demand.

Futures fell following a negative session on Wall Street, as investors fretted over Trump’s tariffs, which are set to take effect from April 2. Trump is also expected to announce a host of other tariffs on the date, which he has touted as “liberation day.”

Heavyweight technology stocks with exposure to AI, such as Nvidia, fell sharply on Wednesday amid growing fears of oversupply in the AI data center industry. A note from TD Cowen also showed AI hyperscaler Microsoft had canceled several data center contracts.

S&P 500 Futures fell 0.2% to 5,746.50 points, while Nasdaq 100 Futures fell 0.3% to 20,053.50 points by 20:20 ET (00:20 GMT). Dow Jones Futures fell 0.1% to 42,687.0 points.

Trump announces auto tariffs, car stocks slide

Trump said he will impose 25% tariffs on all foreign-made cars and light trucks, effective April 2.

The move is expected to ramp up local automobile costs in the near-term, as manufacturers race to find new supply chains and shift more of their production into the U.S.

But the 25% tariff also heralds pain for U.S. automakers, given that a bulk of them operate factories outside the U.S., especially in Mexico.

General Motors Company (NYSE: GM ), Stellantis NV (BIT: STLAM ), and Ford Motor Company (NYSE: F ) sank between 4.5% and 7% in aftermarket trade, while electric vehicle major Tesla Inc (NASDAQ: TSLA ) fell 0.6% after a 5.6% tumble during Wednesday’s session.

U.S.-listed foreign automakers Toyota Motor Corporation (NYSE: TM ), Honda Motor Co Ltd (NYSE: HMC ), and Ferrari NV (NYSE: RACE ) fell between 1.7% and 3%.

Trump’s auto tariff threat sparked renewed concerns over the economic impact of his tariff agenda, especially as he gears up to impose tariffs on several major U.S. trading partners.

Analysts and policymakers have expressed concerns that Trump’s tariffs will disrupt global trade and underpin local inflation, given that they will be borne by local importers who will pass on costs to consumers.

Wall St retreats, tech hit by AI demand doubts

Losses in auto stocks spilled over into other sectors, dragging down Wall Street as investors fretted over the impact of Trump’s tariffs.

But losses in tech stocks also weighed, amid growing concerns of oversupply in AI data centers and computing capacity.

A TD Cowen note showed AI hyperscaler Microsoft Corporation (NASDAQ: MSFT ) had canceled several data center leases in the U.S. and Europe. This came just a day after Alibaba (NYSE: BABA ) Chair Joe Tsai warned of an AI data center bubble in the U.S.

A Financial Times report also showed potentially tougher market conditions for chipmakers selling to China, after Beijing announced tougher energy regulations.

AI major NVIDIA Corporation (NASDAQ: NVDA ) fell 1.2% after tumbling 5.7% during Wednesday’s session. Sever makers Broadcom Inc (NASDAQ: AVGO ), Dell Technologies Inc (NYSE: DELL ), and Super Micro Computer Inc (NASDAQ: SMCI ) also fell in aftermarket trade.

Losses in tech were a major weight on Wall Street, which sank on Wednesday after a recent rebound from six-month lows ran out of steam.

The S&P 500 fell 1.1% to 5,712.20 points, while the NASDAQ Composite slid 2% to 17,899.02 points. The Dow Jones Industrial Average fell 0.3% to 42,454.79 points.