Stocks and Dollar Drop Amid Trade Tensions
U.S. stocks declined as President Donald Trump announced possible new tariffs on Friday.
He proposed a 50% duty on imports from the European Union starting on June 1 and is considering a 25% tax on Apple iPhones made outside of the US.
International trade tensions have reached an important turning point with this escalation, which could have long-term effects on the industry of manufacturing and technology sectors.
These new trade worries frightened investors, and the US dollar and major indices fell as a result.
The market as a whole fell as Apple’s stock fell 3%. While the S&P 500 and Nasdaq both saw declines of about 0.7% and 1%, correspondingly, the Dow Jones slid 256 points, or 0.61%.
All three indexes ended the week more than 2% lower, despite the fact that losses subsided toward the end of the session.
Tariff Talk Fuels Safe-Haven Rush
Government bonds in both the U.S. and Europe gained as investors sought safety amid uncertainty. Yields on the U.S. 10-year note fell to 4.517%, and 30-year yields dipped to 5.042%.
Spot gold jumped 2.14% to $3,364.74 per ounce, reflecting the rising caution in markets.
Trump, writing on his Truth Social platform, criticized the EU, calling it “very difficult to deal with” and blaming it for exploiting the U.S. on trade.
His latest comments follow a tense week in markets. Just days earlier, Moody’s downgraded the U.S. credit outlook, and the House narrowly passed Trump’s new tax cut plan.
This bill could add nearly $4 trillion to the already $36 trillion national debt.
Experts say markets are reacting strongly to the potential Apple tariffs, which caught many by surprise. “It’s a shift from negotiation to confrontation,” said one advisor.
Oil prices edged up as traders adjusted positions ahead of the long Memorial Day weekend. Brent crude ended at $64.78 a barrel, while U.S. WTI settled at $61.53.
