US Stock Futures Dip, Dollar Gains On Trump Tariffs: Markets Wrap

Stocks lost momentum and the dollar strengthened after President Donald Trump ratcheted up trade tensions yet again by floating a higher “blanket tariffs” rate on most trading partners.

Contracts for the S&P 500 reversed their earlier gains and fell 0.5% and a gauge of the dollar rose 0.2% after Trump said in an interview with NBC News Thursday he plans to impose blanket levies of 15% or 20%. The current blanket tariff rate is 10%.

Asian equities pared their gains to trade flat Friday. The Canadian dollar weakened after the president said he will impose 35% on goods from the country. Gold rose for a third day as investors sought haven assets.

“The latest news of a higher tariff rate on Canada and potentially others as well has seen risk getting pared back,” said Khoon Goh, head of Asia research at Australia and New Zealand Banking Group Ltd. “We are likely to see more risk aversion across Asia as investors pare back their positions ahead of the weekend, to avoid any whiplash that could occur next week on further tariff news over the next couple of days.”

Tariff tensions have increased recently as Trump pushed ahead with his plans to impose levies on various trading partners in a bid to remake the global trade, which he says wasn’t favorable to the US. Even so, investors have been piling back into stocks - the S&P 500 closed at a record Thursday - in a sign investors are shifting their focus from concerns about lower growth and higher inflation to prepare for the earnings season.

Trump will levy a 35% tariff on goods coming into the US from Canada, he said in a post on Truth Social. It would take effect from Aug. 1. It’s not clear whether a current exemption for goods traded under the USMCA trade pact would be extended or ended.

The moves signal no retreat from his flagship economic policy, with Trump noting to NBC the recent rise in US equity markets.

Separately,  Hong Kong authorities intervened for the fourth time in two weeks to prevent the city’s currency from weakening beyond its official trading band.

In Asian corporate news, Nissan Motor Co. raised $4.5 billion from a junk-bond sale in US dollar and euros. The embattled automaker is offering a record-high coupon on at least one part of the deal to drum up demand.

Elsewhere, JPMorgan Chase & Co. is considering cutting the weight of bond issuers in its emerging-market index — including China and India — as it seeks to reflect a broader range of developing-nation debt.

Some of the main moves in markets:

Stocks

• S&P 500 futures fell 0.5% as of 9:45 a.m. Tokyo time

• Hang Seng futures were little changed

• Japan’s Topix rose 0.4%

• Australia’s S&P/ASX 200 was little changed

• Euro Stoxx 50 futures fell 0.6%

Currencies

• The Bloomberg Dollar Spot Index rose 0.2%

• The euro fell 0.3% to $1.1669

• The Japanese yen fell 0.1% to 146.45 per dollar

• The offshore yuan was little changed at 7.1826 per dollar

Cryptocurrencies

• Bitcoin rose 1.7% to $115,493.95

• Ether rose 3.9% to $2,929.32

Bonds

• The yield on 10-year Treasuries declined one basis point to 4.34%

• Japan’s 10-year yield was unchanged at 1.485%

• Australia’s 10-year yield advanced three basis points to 4.31%

Commodities

• West Texas Intermediate crude rose 0.4% to $66.81 a barrel

• Spot gold rose 0.3% to $3,335.38 an ounce

This story was produced with the assistance of Bloomberg Automation.