By Al Root

The end of cheap cars is hanging over America. The average new-car price is up roughly $10,000 since the pandemic. With higher interest rates, car payments for an average household have risen some $2,000 annually since 2019.

Cheaper models are hard to find. Many are assembled in Mexico, such as sub-$30,000 Kia K4s and Nissan Sentras, which got hit by 2025 U.S. tariffs, adding $1,000 to their costs, notes Cars.com. Now, with renegotiation of the U.S.-Mexico-Canada Agreement, or USMCA, looming, The Wall Street Journal reports that foreign auto makers are threatening to pull their cheapest models from the U.S. if a satisfactory deal isn't reached.

For its part, the administration wants more U.S.-assembled cars. But the threat goes beyond imports. All vehicles assembled in the U.S. rely on parts sourced from Canada and Mexico. "U.S. auto makers cannot continue to produce affordable options for American consumers without the certainty and scale provided by a trilateral USMCA," Jennifer Safavian, CEO of Autos Drive America, a trade group for foreign auto makers in the U.S., told WSJ.

General Motors CEO Mary Barra said on an earnings call that the company is working with the administration on vehicle assembly and parts. "We look forward to having USMCA revised in a way that is appropriate to achieve the administration's goals, as well as strengthens the U.S. manufacturing." If not, kiss that cheap ride goodbye.

Write to Al Root at allen.root@dowjones.com

Last Week

Markets

The Strait of Hormuz remained closed as Iran talks stalled; Brent crude oil hit a three-week high on Tuesday. Stocks flagged in the run-up to Big Tech earnings. With the probe into outgoing Federal Reserve Chair Jerome Powell dropped, Kevin Warsh neared confirmation as chair. Meanwhile, the Fed held rates steady, and Powell said he'd stay as governor. Tech powered the S&P 500 and Nasdaq Composite to new highs on Thursday, ending a blowout month. On the week, the Dow Jones Industrial Average rose 0.6%; the S&P, 0.9%; and the Nasdaq, 1.1%.

Companies

The Wall Street Journal reported that OpenAI missed key internal goals, sending stocks like Oracle, CoreWeave, and SoftBank Group down. Earnings at Alphabet, Microsoft, and Amazon.com all topped expectations, fueled by cloud revenue. Meta Platforms beat as well, but shares fell on spending concerns. Apple beat on robust iPhone sales. Spirit Airlines neared a shutdown after failing to get a government bailout. United Arab Emirates pulled out of OPEC.

Deals

China blocked Meta Platforms' $2 billion deal for AI agent start-up Manus... Organon agreed to be acquired by India's Sun Pharmaceutical Industries for $11.8 billion... Pernod Ricard and Brown-Forman ended merger talks, and United Airlines abandoned its pursuit of American Airlines...Bill Ackman's Pershing Square USA raised $5 billion in an initial public offering for a closed-end fund and management company. Fund shares fell 18% on the debut.

Next Week

Monday, 5/4

Wall Street will get a look at earnings from another wave of major tech firms, starting with Palantir Technologies after the close on Monday. Advanced Micro Devices, Arista Networks, and Shopify will report on Tuesday, followed by Arm Holdings and Uber Technologies on Wednesday.

Wednesday, 5/6

Walt Disney reports results on Wednesday morning, the first quarterly earnings call under new CEO Josh D'Amaro. The consensus among Wall Street analysts polled by FactSet calls for adjusted earnings of $1.49 a share on revenue of $24.84 billion.

Thursday, 5/7

Fast-food chains McDonald's and Wendy's report results on Thursday and Friday, respectively.

Friday, 5/8

The big economic data release to watch for the week will be Friday's nonfarm payrolls report for April from the Bureau of Labor Statistics. The consensus among economists polled by FactSet predicts that the U.S. economy added 50,000 nonfarm jobs in April, down from 178,000 in March. Economists expect the unemployment rate to have held steady at 4.3%.

The Numbers

$2.9 T

Global military expenditures in 2025, up 2.9% from 2024 and the 11th consecutive year of increases.

49.8

The April reading of the University of Michigan's consumer sentiment survey, lowest in 74 years.

$65 B

The forecast for U.S. spending on power-generation equipment by 2030, up from $2.6 billion last year.

$31.3 T

The U.S. national debt, now at 100.2% of GDP and nearing a level only reached during World War II.

Write to Robert Teitelman at bob.teitelman@dowjones.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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May 01, 2026 19:14 ET (23:14 GMT)

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