Stocks Fall, Gold Gains on Trump’s Tariff Threat: Markets Wrap

Stocks dropped along with the dollar as President Donald Trump ratcheted up trade tensions ahead of next week’s deadline for higher tariffs.

Europe’s benchmark index fell 0.5%, with trade-exposed miners and automakers among the biggest decliners. Asian equities also dipped. Futures for the S&P 500 slid 0.4%, with US stocks and Treasury markets closed for the July 4 holiday.

Trump warned trading partners on Thursday that his administration may begin issuing letters outlining unilateral tariff rates as soon as today, with a July 9 deadline for negotiations drawing near. Gold rose 0.4% as investors sought havens. The dollar edged lower 0.1%.

Investors are cautiously awaiting the outcome of various trade negotiations during the current pause on Trump’s April tariffs. Stocks have rallied to new highs as concerns that the levies would push the US into a recession have eased. On Thursday, US jobs growth data exceeded expectations, prompting traders to all but erase bets for a July interest-rate cut.

“There is still uncertainty out there, but one thing we do know is the US economy seems to be holding up relatively well,” said Tony Sycamore, market analyst at IG Australia.

Investors such as Jung In Yun, chief executive officer at Fibonacci Asset Management Global Pte. in Singapore, are holding more cash and waiting for Monday to see how the market reacts.

“Portfolio has more cash than normal times for now,” he said. “I find too much optimism among other managers a bit uncomfortable.”

Trump secured a sweeping shift in US domestic policy as the House passed a $3.4 trillion fiscal package that cuts taxes and curtails spending on safety-net programs. A $5 trillion increase in the US debt limit also eliminates the risk of an imminent market-rattling payment default.

Separately, the Chinese government intends to cancel part of a two-day summit with European Union leaders planned for later this month, as diplomatic and trade tensions escalate between the two trading partners.

Beijing also imposed anti-dumping duties on European brandy for five years. Remy Cointreau SA and Pernod Ricard SA briefly slipped before erasing the losses.

In commodities, oil dropped in the lead up to an OPEC+ meeting that’s set to deliver another oversized production hike, threatening to swell a glut forecast for later this year.

• Air France-KLM will initiate the process of raising its minority stake in Scandinavian airline SAS AB to 60.5%, as it looks to extend consolidation in European aviation.

• India’s regulator has temporarily barred Jane Street Group LLC from accessing the local securities market, dealing a severe hit to the US firm that allegedly made $4.3 billion in trading gains in the South Asian nation in less than two years.

• French train maker Alstom SA has won a €2 billion ($2.4 billion) order from New York’s Metropolitan Transportation Authority, which is in the process of modernizing its fleet.

• A European insurance group backed by Apollo Global Management Inc. offered to acquire a specialist UK insurer that’s partly owned by a company controlled by South African billionaire Johann Rupert for about £5.7 billion ($7.8 billion).