General Motors Plunges 7.5% Intraday—What's Fueling the Turbulent Slide?

Summary
• General Motors (GM) reports Q2 2025 earnings with a $1.1 billion tariff hit and lowered guidance.
• Stock plunges 7.5% to $49.22, hitting intraday low of $49.145 amid sector-wide tariff pressures.
• $4 billion U.S. plant investment aims to mitigate $4–5 billion annual tariff exposure.
• EV sales growth slows as tax credits expire, with EVs contributing just 46,300 units in Q2.

General Motors' intraday collapse reflects a perfect storm of earnings underperformance, Trump-era tariff burdens, and shifting EV market dynamics. With the stock trading below its 52-week low and key technical indicators flashing bearish signals, the automotive sector faces a pivotal moment as investors weigh the company's $4 billion domestic retooling against a $5 billion annual tariff drag.

Tariff Woes and Earnings Disappointment Spark Sharp Selloff
General Motors' 7.5% intraday plunge stems from a trifecta of headwinds: a $1.1 billion Q2 tariff-related loss, a 35% profit decline, and guidance adjustments for $4–5 billion annual tariff impacts. The stock's collapse aligns with Trump's 25% auto tariffs, which automakers estimate could cost $107.7 billion annually across the industry. Compounding these pressures, GM's EV strategy faces headwinds as tax credits expire, with EV sales growth slowing despite 46,300 units in Q2. The company's $4 billion U.S. investment aims to reduce tariff exposure but arrives as sector peers like Stellantis report $2.68 billion first-half losses from similar policies.

Automotive Sector Under Pressure as Ford Trails GM's Slide
While GM's -7.498% drop outpaces Ford's -1.327% decline, both automakers face identical tariff headwinds. Ford's modest selloff reflects its own $2.7 billion first-half loss projection from Trump policies, though its smaller exposure to imported components mitigates the impact. The sector-wide pain is evident in the automotive ETF's -4.1% intraday move, highlighting systemic risks as automakers collectively grapple with $107.7 billion in estimated annual tariff costs.

Options Playbook: Navigating GM's Volatility with Strategic Calls and Puts
• 200-day average: 49.93 (near); RSI: 76.6 (overbought); MACD: 1.16 (bullish divergence)
• Bollinger Bands: 47.88–55.45 (price near lower band); 30D support: 53.15–53.27
• Turnover rate: 1.23% (high liquidity); Dynamic PE: 4.52 (valuation floor)

Key levels to monitor include the 200-day average ($49.93) and 30D support zone ($53.15). Short-term volatility suggests a bearish continuation below $49.93, but technical indicators hint at a potential rebound if buyers emerge at $47.88. For leveraged exposure, consider GM20250725C49.5 (IV: 37.64%, leverage: 72.47%, delta: 0.467) and GM20250725C50 (IV: 36.64%, leverage: 107.13%, delta: 0.364).

• GM20250725C49.5 (Call Option):
- Strike: $49.50 | Expiry: 2025-07-25 | IV: 37.64% (moderate)
- Delta: 0.467 (balanced sensitivity) | Theta: -0.2816 (rapid time decay)
- Gamma: 0.2047 (high price sensitivity) | Turnover: 36,685 (liquid)
- Payoff (5% down to $46.76): max(0, 46.76 - 49.50) = $0 (break-even)
- Ideal for aggressive bulls expecting a $50+ rebound.

• GM20250725C50 (Call Option):
- Strike: $50.00 | Expiry: 2025-07-25 | IV: 36.64% (moderate)
- Delta: 0.364 (moderate sensitivity) | Theta: -0.2337 (controlled time decay)
- Gamma: 0.1986 (high sensitivity) | Turnover: 104,963 (highly liquid)
- Payoff (5% down to $46.76): max(0, 46.76 - 50.00) = $0 (break-even)
- Best for capitalizing on a $50+ reversal with lower risk.

If $49.93 breaks, GM20250725P46.5 offers short-side potential. Aggressive bulls should target a $50.50 close to confirm a bullish reversal.

Backtest general motors Stock Performance
General Motors (GM) has historically shown positive short-to-medium-term gains following a significant intraday plunge of at least -7%. The backtest data reveals that:1. Frequency and Win Rates: The event occurred 578 times over the past five years, with a 3-day win rate of 54.67%, a 10-day win rate of 54.67%, and a 30-day win rate of 58.65%. This indicates a higher probability of a positive rebound in the immediate aftermath of such a significant drop.2. Returns: The average 3-day return following the event was 0.28%, with a maximum return of 4.67% on day 58. The 10-day return was slightly higher at 1.10%, with a maximum return of 5.78% on day 60. The 30-day return was 3.18%, with a maximum return of 7.89% on day 62.3. Max Return Days: The maximum return was observed later in the 10-day period, with the 5th day being the peak at 4.67%, and the 10th day being the peak at 5.78%. This suggests that while the rebound is often swift, it may take a few days for the market to fully recover and reach its highest point.4. Cumulative Returns: The cumulative returns over the 3, 10, and 30 days show that the stock tends to recover and even surpass its pre-event levels, indicating that investors may find opportunities in the aftermath of a substantial downturn.In conclusion, GM's performance following a -7% intraday plunge is generally positive, with a higher likelihood of gains in the short to medium term. Investors may consider these events as potential buying opportunities, keeping in mind the variability in return patterns and the need for careful market analysis before making investment decisions.

Bullish Breakout or Bearish Breakdown? Immediate Action Required as GM Nears Critical Levels
The selloff shows signs of exhausting near $47.88, but a sustained close below $49.93 would confirm a bearish trend. Watch for a test of the 30D support zone ($53.15) to gauge buying interest. Ford's -1.327% decline suggests sector-wide vulnerability, but GM's leveraged options (e.g., GM20250725C50) offer high-reward potential for those betting on a $50+ rebound. Traders should prioritize liquidity by focusing on options with turnover >10,000 and IV between 30–75%. A decisive move above $52.08 would validate a bullish breakout, while a breakdown below $49.145 signals further pain. Position now—GM's next move could redefine its 52-week range.