NEW YORK, USA – The stock market suffered drops on Friday as President Donald Trump intensified trade tensions with the European Union, announcing a recommendation for a 50% tariff set to begin on June 1, 2025.
The Dow Jones Industrial Average lost 256.02 points, closing at 41,603.07, while the S&P 500 dropped by 0.67% to finish at 5,802.82. The tech-heavy Nasdaq fell by 1%, settling at 18,737.21.
Trouble for Apple became evident as shares fell 3% after Trump stated on Truth Social that iPhones sold in the United States must be made domestically. He warned that imports not complying would incur a tariff of at least 25%.
Trump was blunt about his dealings with the EU, saying, “Our discussions with them are going nowhere!” This declaration upset investors, who were enjoying a period of calmer trade negotiations.
A significant drop occurred earlier in the week triggered by concerns over Trump’s budget bill and its potential impact on the U.S. deficit. The 30-year Treasury yield reached heights not seen this year, exceeding 5.1%. The recent worries prompted a flight to safety in bonds.
Peter Boockvar, chief investment officer at Bleakley Financial Group, commented on the disarray: “Capitalism works best when it is left alone… but we keep straying from that basic economic concept.”
Trump’s latest controversies have revived uncertainty in the market, which had seen a handful of weeks with positive momentum following earlier tariff reductions and agreements with nations including the U.K. and China.
In other developments, shares of United States Steel surged by 21% after Trump supported their partnership deal with Japan’s Nippon Steel. The move is expected to create around 70,000 jobs and contribute $14 billion to the U.S. economy in the coming months.
Investment strategist Ross Mayfield stated, “We’ve had this de-escalation tailwind at the market’s back for like six weeks now…a re-escalation of trade war rhetoric threatens that.”
Market predictions suggest a potential increase in volatility related to Trump’s trade policies as Rick Wedell, president and chief investment officer at RFG Advisory, explained: “It is very important for investors to understand that this lingering trade issue is likely to be here for… the duration of this administration.”
Amid these uncertainties, other tech stocks also took hits. Investors are wary of possible ramifications across various markets as Trump’s shift in focus could signify more complications ahead.
The day marked a notable dip in stocks with the energy sector taking the hardest hit, down nearly 4.8% over the week. Meanwhile, communication services fell 0.6% by Friday’s close.
In a note, Wells Fargo analyst Gabe Hajde suggested that despite the current fluctuations, there is a viable path to growing profits in certain sectors, hinting that optimism could still exist for specific growth stories.
As the trade debates heat up again, market watchers are cautious, remaining alert to further developments that could either exacerbate the situation or begin to stabilize the trading environment.
Overall, Friday’s trading reinforces the precariousness that continues to underpin the market as Trump’s comments about tariffs shake investor confidence once again.
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