Stocks Fall As Trump’s Trade Threats Lift Dollar: Markets Wrap
Contracts for the S&P 500 fell 0.6% after Trump said he plans to impose blanket levies of 15% or 20%.
Stocks retreated from all-time highs as President Donald Trump intensified his trade offensive, sending the dollar higher against most of the world’s major currencies. Concerns about the potential inflationary impacts of tariff hikes weighed on Treasuries.
Following a rally that drove the S&P 500 to its fifth record in nine trading days, equity bulls took a breather on Friday. Meta Platforms Inc. and Apple Inc. led losses in megacaps, while Nvidia Corp. continued to rise after hitting the $4 trillion milestone. Cryptocurrency-exposed climbed after Bitcoin topped $118,000 for the first time. The six biggest US banks are set to report earnings next week, with analysts predicting trading-revenue increases.
While negative trade headlines and tariff threats may multiply in the coming weeks, US trade policy will likely move toward greater stability in the second half of the year, according to Ulrike Hoffmann-Burchardi at UBS Global Wealth Management.
“Our base case is that the effective US tariff rate will land near 15% by year-end, slowing the US economy over the next six months but not causing a recession,” she said. “Many of the most heavily weighted US equities in the S&P 500 are fairly insulated from tariff risk, in our view, and we think the index can climb to 6,500 by June next year despite periodic volatility.”
The gauge closed Thursday on the edge of 6,300.
Investors are counting on US stocks to rally on the back of a robust corporate earnings season, before the market loses steam toward year-end, according to Bank of America Corp. strategists.
Client feedback suggests “no one” is worried about the economy or equity valuations, strategist Michael Hartnett wrote in a note. A majority of them expect a forecast-beating second-quarter reporting season and for companies to pledge higher spending on artificial intelligence.
Corporate Highlights:
AMC Entertainment Holdings Inc. jumped after Wedbush upgraded the movie-theater operator to outperform, saying the company “is poised to benefit from a more consistent release slate over the next several quarters.”
Capricor Therapeutics Inc. tumbled after US regulators rejected the company’s treatment for a deadly muscle disorder.
Levi Strauss & Co. climbed after raising its revenue outlook, with the maker of 501 jeans expecting sales growth to outweigh the effect of President Donald Trump’s tariffs.
Texas Instruments Inc. was upgraded to buy at TD Cowen, which said the chipmaker is uniquely positioned as industry cycle improves.
Tesla Inc. will open its first showroom in India on Tuesday and begin deliveries as early as next month, according to people familiar with the matter, as the Elon Musk-led electric vehicle maker looks to tap potential demand in the third-largest automobile market to counter slowing sales elsewhere.
Delta Air Lines Inc. has been cannibalizing new Airbus SE jets in Europe by stripping off their engines and using them to get grounded planes in the US back into service, as it seeks to overcome a shortage and avoid aircraft import tariffs.
Mali’s government seized more than a ton of gold from Barrick Mining Corp., days after the West African nation’s junta leader signed a law granting himself a mandate renewable forever.
Some of the main moves in markets:
Stocks
The S&P 500 fell 0.7% as of 9:46 a.m. New York time
The Nasdaq 100 fell 0.5%
The Dow Jones Industrial Average fell 0.8%
The Stoxx Europe 600 fell 1%
The MSCI World Index fell 0.6%
Currencies
The Bloomberg Dollar Spot Index rose 0.2%
The euro was little changed at $1.1702
The British pound fell 0.5% to $1.3514
The Japanese yen fell 0.5% to 147.03 per dollar
Cryptocurrencies
Bitcoin rose 3.4% to $117,396
Ether rose 5.9% to $2,986.98
Bonds
The yield on 10-year Treasuries advanced five basis points to 4.40%
Germany’s 10-year yield advanced two basis points to 2.72%
Britain’s 10-year yield advanced three basis points to 4.63%
The yield on 2-year Treasuries advanced three basis points to 3.90%
The yield on 30-year Treasuries advanced six basis points to 4.93%
Commodities
West Texas Intermediate crude rose 1.9% to $67.83 a barrel
Spot gold rose 0.9% to $3,354.04 an ounce
