U.S. stocks shed gains in early trading on Friday as investors sharply reacted to President Donald Trump’s fresh tariff threats against the European Union.
The Dow Jones Industrial Average fell more than 480 points, and the benchmark index S&P 500 shed 1% as stocks opened lower amid market reaction. Nasdaq Composite also edged lower, down 1.2%.
Having pared gains in recent days, driven by macroeconomic and geopolitical concerns, global stocks looked set to end the week on a losing note as traders weighed the latest tariffs-related move from President Trump.
Notably, this comes not long after the United States struck deals with the United Kingdom and China, agreements that sparked upbeat momentum across Wall Street. However, with U.S. deficit jitters rising, stocks are moving from muted returns to broader market worries.
In terms of what Trump has said about the U.S.-EU trade talks, nothing is moving. Basically, with this stalling, he sees the next step as a 50% tariff on the EU.
“The European Union, which was formed for the primary purpose of taking advantage of the United States on trade, has been very difficult to deal with. Our discussions with them are going nowhere!” Trump wrote on Truth Social. “Therefore, I am recommending a straight 50% Tariff on the European Union, starting on June 1, 2025. There is no Tariff if the product is built or manufactured in the United States.”
While investor attention had shifted from tariffs to U.S. debt deficit and government policy, Trump’s recommendation of a 50% tariff on the EU swings sentiment back to this topic.
The U.S. president’s warning that iPhone maker Apple also faces a 25% tariff on iPhones made elsewhere adds to the overall sense that markets may yet suffer pain.
Dow, S&P 500 and Nasdaq are all set to end the week negative, while the Euro and Dollar have also dropped.
Meanwhile, while gold was up 1.9% to $3,356, the benchmark cryptocurrency Bitcoin (BTC) hovered near $108k, down 2.6%. Bitcoin reached an all-time high above $111.8k this week.