GM, Ford Shares Dip as Morgan Stanley Downgrades US Auto Industry

Investors sold after the investment bank’s analysts warned about what they called the ‘China butterfly effect.’

GMC Hummer EVs is are pictured at General Motors's Factory ZERO electric vehicle assembly plant in Detroit, Mich., on Nov. 17, 2021. Nic Antaya/Getty Images

Shares of General Motors and Ford Motor traded lower on Wednesday after Morgan Stanley downgraded the overall U.S. auto sector, citing worries that Western automakers might struggle in the intensifying competition with Chinese rivals.

General Motors was downgraded to “underweight” from “equal weight,” and its shares fell 5.4 percentage points, to $45.50. Ford went to “equal weight” from “overweight,” with its shares dropping more than 4 percentage points, to $10.43.