Markets Dip as Trump’s Tariff Threats Renew Trade Fears
By Stephen Wisnefski, Executive Editor at News, Investopedia
Updated May 23, 2025, 06:06 PM EDT
In a turbulent day for financial markets, stocks closed lower on Friday as renewed tariff threats from President Donald Trump reignited fears over international trade relations. This development follows a week where major indexes struggled and ultimately posted significant losses.
Market Performance Overview
The Dow Jones Industrial Average fell by 0.6%, while the S&P 500 and Nasdaq Composite slid by 0.7% and 1%, respectively. Following a week filled with instability, these declines added to the previous losses, with both the Dow and Nasdaq recording a 2.5% decrease for the week. The S&P 500, currently on a four-day losing streak, lost 2.6% during this same period.
Trump’s Tariff Statements
The volatility was exacerbated by comments from Trump, who indicated on his social media platform, Truth Social, that negotiations with the European Union (E.U.) were not progressing well. He proposed a steep 50% tariff on imports from the E.U., which is set to begin on June 1. Additionally, Trump stated that any iPhone sold in the U.S. must be manufactured domestically, warning Apple that a tariff of "at least 25%" would be applied if it failed to comply. This declaration reintroduced fears regarding the unpredictability of Trump’s trade policies, causing market apprehension about their potential impact on economic growth and corporate profitability.
In recent weeks, there had been a sense of optimism in the markets as Trump appeared to ease his stance on trade, particularly following a pause on previously imposed tariffs against major trading partners, including China.
Impact on Major Tech Stocks
The threats from Trump had immediate repercussions on key technology companies. Apple shares fell by 3%, marking the eighth consecutive day of decline for the tech giant and leading downtrends for other major corporations like Microsoft, Nvidia, Amazon, Alphabet, and Meta Platforms, all of which saw drops exceeding 1%. Tesla and Broadcom also experienced slight declines, highlighting the pervasive impact of tariff discussions within the tech sector.
Noteworthy Stock Movements
While many stocks struggled, several made significant moves following the release of earnings reports. Shares of Deckers, the parent company of UGG and Hoka brands, plummeted by 20%, the largest drop for any S&P 500 stock. The company refrained from offering full-year guidance, linking its uncertainty to potential trade disruptions and tariffs, given its significant manufacturing operations in China.
In contrast, Intuit, known for its TurboTax software, surged 8.1% after reporting stronger-than-expected earnings along with a positive outlook. Analysts praised the company’s performance, with several firms subsequently raising their price targets for the stock.
Broader Economic Indicators
In other market indicators, Bitcoin experienced a surge to $108,300, briefly hitting an all-time high of nearly $112,000 earlier in the week. Meanwhile, the yield on the 10-year Treasury note decreased to 4.51%, down from 4.55%, impacting borrowing costs for consumers and businesses alike. The U.S. dollar index dropped by 0.9%, trading at its lowest point this month, while gold futures rose by 1.9% to $3,360 an ounce, reflecting a flight to safe-haven assets amid the equity market downturn.
Conclusion
As traders digest the implications of Trump’s tariff announcements and the enduring volatility shakes the markets, it appears that the tension surrounding global trade relations will continue to play a significant role in shaping the economic landscape in the coming weeks. Investors remain on high alert for developments that could either stabilize or further destabilize market conditions.
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