Traders on the New York Stock Exchange felt the effects of President Trump’s recent trade announcements. On Friday, stock futures fell. This came a day after the S&P 500 hit a record high. Trump’s announcement included a hefty 35% tariff on Canada, which sparked concerns among investors.
Futures for the Dow Jones dropped by 238 points, or about 0.5%. Similarly, S&P 500 futures fell by the same percentage. The tech-heavy Nasdaq also experienced a decline of 0.4%. Despite these drops, the Nasdaq and S&P 500 both reached new highs just a day before.
In a letter shared on Truth Social, Trump explained that higher tariffs on Canada are partly due to fentanyl issues. He indicated that if Canada cooperated to stop the flow of fentanyl, there could be room for negotiation. He also mentioned potential blanket tariffs of 15% to 20% on other countries, up from the previous 10%.
Interestingly, Trump claimed that tariffs had generally been well-received, citing the recent stock market highs. The S&P gained 0.3% on Thursday, while the Nasdaq increased by 0.1%. This surge occurred despite the announcement of a 50% tariff on imported copper and a similar rate for Brazil.
One of the drivers for recent market gains has been Nvidia. Its push toward a $4 trillion market valuation, fueled by AI developments, has encouraged investor optimism. However, Nvidia saw a decline in premarket trading on Friday, which mirrored a broader sell-off across tech shares.
The financial sector didn’t fare well either. JPMorgan led banks lower, down about 1% in early trading. Analysts like Drew Pettit, who directs U.S. equity strategy at Citi, warn that the economy must remain strong for the stock market rally to last. He emphasized that current economic indicators and interest rates need to align for sustained growth.
As markets face losses, all eyes will soon turn to the second-quarter earnings reports and upcoming inflation data. This information will be crucial for investors looking to navigate the market’s future movements.
For more insights into market dynamics and economic strategies, you can check out CNBC for expert analyses and up-to-date information.
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