Trump’s AI Plan Was Hiding in Plain Sight

Hey there, bargain hunter. General Motors fell 5.1% on Friday to close at $82.20, its worst session since July 2025. No earnings warning, no recall, no executive departure. The only news was record diesel and a ten-year Treasury that touched 5.04% earlier this week. Those two numbers are not incidental to GM’s business. They are the business.

Scoreboard

GM shed roughly $5.8 billion in market value in a single session, sliding from an $86.35 open with almost no bounce. Thursday’s 3.6% gain was erased in full. Ford fell 2.9% to $13.22. Stellantis dropped around 4.6%, though it was already down 55% year-to-date on its own structural problems. XLY fell 0.6%, SPY barely 0.2%. The auto names moved in a coordinated stack, which is the tell: macro forced the selling, not fundamentals.

What Actually Happened

Diesel surged to fresh records this week. AAA’s national average was about $6.23 on Monday, September 14, and it was higher again by Saturday, September 19. Energy prices have been a macro problem for autos all month, and it does not take a company-specific headline to hit the group when fuel is doing this.

At the same time, the ten-year yield touched 5.04% earlier this week, its highest since 2007, after the Federal Reserve raised rates for the first time since 2023 and Fed Chair Kevin Warsh signaled additional tightening is on the table. As of Friday the yield pulled back to around 4.94%, but the direction is clear.

Together these two inputs compress GM from both sides. High diesel raises the total cost of ownership for full-size pickup buyers and commercial fleet operators. A five-handle on the ten-year means a $60,000 truck financed for 60 months carries a meaningfully higher monthly payment than it did 18 months ago. Demand and affordability erode in parallel.

What the Business Actually Is

GM runs a truck franchise. That is not reductive, it is just accurate. In the first half of 2026, GM held an approximately 42% share of the U.S. full-size pickup segment. Fleet sales hit their best first half in over five years, including record commercial pickup deliveries in Q2. Full-size trucks and SUVs have seen per-unit profit growth exceeding 25% since 2020. In Q1 2026, GM kept incentive spending at 4.4% of MSRP against an industry average of 6.6%, holding average transaction prices at $52,000.

Strip away the trucks and you are left with a shrinking EV division, a weakening China business, and a software segment with promising but unproven economics. The truck franchise is carrying all of it.

Data Section

• Q2 2026 revenue: $48 billion, up 1.9% year over year
• Q2 EBIT-adjusted: $3.94 billion, up 29.8% from Q2 2025
• H1 2026 adjusted EPS: $7.27, up 35% year over year
• Full-year 2026 guidance: EBIT-adjusted $14 to $16 billion; adjusted EPS $12 to $14; adjusted automotive free cash flow $9.5 to $11.5 billion
• North American EBIT-adjusted margin Q2: 8.6%, within GM’s 8-10% target range
• Software and services revenue Q2: $800 million, up 20% year over year
• Q2 GAAP EPS growth year over year: down 26.0%, reflecting EV-related charges and other adjustments

Is It Cheap?

At $82.20, GM trades at roughly 6.2x forward earnings against full-year EPS guidance of $12 to $14. The vehicles and parts industry median forward multiple runs around 14x. That gap is wide enough that you could argue GM is the cheapest large-cap in the consumer cyclical space on this metric alone.

Here is the catch. That forward multiple is only as good as the forward earnings estimate. If diesel stays above $6 through Q4, fleet operators slow their replacement cycles. If the ten-year holds at 5%, consumer financing costs stay punishing. Q2 GAAP EPS was down year over year, largely because earnings quality leans heavily on adjusted figures that exclude ongoing EV losses and restructuring charges. Insiders have sold over $225 million in shares in the past year with no buying.

The discount is real. Whether it is deserved is the question.

Bull / Base / Bear

Bull: Diesel pulls back as Middle East supply risks ease. The ten-year retreats toward 4.5% if the Fed signals a pause. Truck demand holds through Q3, GM delivers the high end of its $12-$14 EPS range, and the stock re-rates toward 8-9x forward earnings, implying a price north of $100.

Base: Diesel stays elevated but below $7. Consumers stretch financing terms rather than abandoning large trucks. GM hits the midpoint of guidance around $13 EPS. Stock grinds sideways between $80 and $90 as the macro overhang limits multiple expansion.

Bear: Diesel above $6.50 through the fall harvest season, when distillate demand historically rises, compounds with a ten-year above 5%. Commercial fleet orders get deferred into 2027. GM cuts guidance, and the forward multiple compresses on lower earnings, not higher valuation. Stock tests the $65-$70 range.

Action Plan

If you own GM, Friday’s move is macro noise until it becomes an earnings revision. Watch for any guidance commentary before Q3 results. Do not add size into a rising-yield, rising-diesel environment without a position limit.

If you are considering entry: $82 is not obviously wrong for a 6x forward earner with a dominant truck franchise, but the macro is not your friend right now. A scale-in approach, buying one-third of your target position here and reserving dry powder for a potential test of $72-$75, is a more defensible structure than a full commitment at Friday’s close.

AZO and ORLY, the parts retailers, are worth watching as an indirect read. When consumers hold their existing trucks longer due to affordability pressure, aftermarket spending tends to rise, partially offsetting the new-vehicle demand hit.

Cheap Investor Checklist

• Weekly diesel price (AAA Monday release): watch for a move above or below $6.30
• Ten-year Treasury yield: a close above 5.10% would be a new 20-year high and a headwind for auto financing
• GM full-year guidance revision: any cut to the $12-$14 EPS range changes the valuation math immediately
• Q3 fleet order data: commercial customers signal demand shifts before retail does
• Incentive spending as a percentage of MSRP: if GM’s 4.4-4.7% climbs toward the 6%+ industry average, pricing power is softening
• Average transaction price: watch for erosion below $50,000
• Middle East energy headlines: any de-escalation would ease diesel prices and remove one leg of Friday’s selling
• Fed communications: any signal of a pause removes a ceiling on consumer borrowing affordability

Bottom Line

If diesel retreats toward $5 and the ten-year drifts back below 4.75%, GM at 6x forward earnings is genuinely cheap, and Friday’s drop looks like an overreaction to transient macro noise. If diesel stays above $6.30 through harvest season and the Fed hikes again, the $12-$14 EPS range is at risk and the multiple deserves to stay compressed. The stock is not obviously a buy or a sell right now. It is a macro call dressed up as a stock pick. Know which trade you are actually making before you make it.