US stock markets experienced a modest decline on Friday, with major indexes closing lower as concerns over new tariff threats from the Trump administration weighed heavily on investor sentiment. The S&P 500 ended the day down by 0.3 percent, following a recent record high. This loss marked a shift for the index, which had previously enjoyed two consecutive weeks of gains.
The Dow Jones Industrial Average decreased by 0.6 percent, while the Nasdaq Composite slipped 0.2 percent. The tech-heavy Nasdaq had also reached an all-time high just a day earlier. As a result of these declines, the Australian share market is projected to open lower, with futures indicating a drop of 13 points or 0.2 percent.
Tariff threats from President Donald Trump have dominated market discussions. On Thursday, Trump announced plans to increase tariffs on many imported goods from Canada to 35 percent, exacerbating tensions between the two countries. This escalation follows the initial 25 percent tariffs imposed in March. The administration’s strategy aims to leverage tariff threats to secure new trade agreements with various nations, including longstanding allies.
Initially, the White House set a deadline of July 1 for countries to negotiate deals or face increased tariffs. However, with only two trade agreements finalized since April—one with the United Kingdom and another with Vietnam—the window for negotiations has been extended to August 1. Trump also mentioned potential tariffs of up to 200 percent on pharmaceuticals and 50 percent on copper imports, aligning these rates with those for steel and aluminum.
Despite the uncertainty surrounding tariffs, Wall Street has displayed relative stability in recent weeks, with stock prices steadily rising. Some analysts, however, express skepticism regarding the market’s resilience. Paul Ashworth, chief North America economist at Capital Economics, noted, “The market’s response to Trump’s tariff escalation this week has been surprisingly muted. Markets appear to believe that Trump will again back down.”
Market dynamics are shifting focus toward the upcoming corporate earnings reporting season. Retail giant Levi Strauss saw its shares surge 11.3 percent after exceeding Wall Street’s sales and profit expectations while also raising its full-year forecast, despite anticipated higher costs due to tariffs. Similarly, PriceSmart shares rose 5.3 percent following robust third-quarter results and plans for expansion into Chile.
The earnings season is set to gain momentum next week, with major banks such as JPMorgan Chase, Wells Fargo, and Citigroup scheduled to report their results on July 11. Financial and healthcare sectors were among the largest detractors on Friday, as shares of Visa fell by 2.2 percent and Gilead Sciences dropped 4.3 percent.
In the airline sector, stocks reacted to Delta Air Lines’ recent positive quarterly results, with Delta’s shares slipping 0.2 percent, while United Airlines and American Airlines fell by 4.3 percent and 5.6 percent, respectively.
Additionally, shares of T-Mobile closed 0.2 percent lower after the Justice Department indicated it would not block the company’s proposed $4.4 billion acquisition of US Cellular, although the deal had been under antitrust scrutiny. Conversely, US Cellular shares increased by 3.6 percent.
In a separate development, shares of aviation company Red Cat Holdings soared by 26.4 percent following orders from Defense Secretary Pete Hegseth to ramp up drone production and deployment.
Overall, the S&P 500 fell by 20.71 points to 6,259.75, while the Dow dropped 279.13 points to 44,371.51, and the Nasdaq declined by 45.14 points to 20,585.53. Bond yields saw an uptick, with the yield on the 10-year Treasury rising to 4.42 percent from 4.34 percent.
Across the Atlantic, European stock indexes also closed lower, following a largely negative performance in Asian markets. In contrast, the cryptocurrency market saw a significant upswing as Bitcoin reached an all-time high of briefly exceeding $118,000 before settling around $117,901, buoyed by positive sentiment in risk assets. This price surge coincided with Nvidia achieving a $4 trillion valuation and occurs just days before the US Congress’ Crypto Week set for July 14, during which lawmakers will discuss potential regulatory frameworks for the industry.
