A modest pullback for U.S. stocks Friday eased the market from all-time highs and left major stock indexes on Wall Street in the red for the week.
The S&P 500 closed 0.3% lower a day after setting a record high. The benchmark index’s loss for the week followed two straight weekly gains.
The Dow Jones Industrial Average dropped 0.6%, and the Nasdaq composite gave up 0.2% after drifting between small gains and losses much of the day. The tech-heavy index was coming off its own all-time high on Thursday.
The selling capped an uneven week in the market as Wall Street kept an eye on the Trump administration’s rollout of new tariff threats against trading partners like Canada and looked ahead to the upcoming corporate earnings reporting season.
President Donald Trump said in a letter Thursday that he will raise taxes on many imported goods from Canada to 35%, deepening the rift between the longtime North American allies. The letter to Canadian Prime Minister Mark Carney is an aggressive increase to the top 25% tariff rates that Trump first imposed in March.
The move was the latest bid by the White House to use threats of higher tariffs on goods imported into the U.S. in hopes of securing new trade agreements with countries around the globe, even historically close trading partners like Canada.
The administration had initially set Wednesday as a deadline for countries to make deals with the U.S. or face heavy increases in tariffs. But with just two trade deals announced since April, one with the United Kingdom and one with Vietnam, the window for negotiations has been been extended to Aug. 1.
Trump also floated this week that he would impose tariffs of as much as 200% on pharmaceutical drugs and place a 50% tariff on copper imports, matching the rates charged on steel and aluminum.
The initial rollout of Trump’s tariff policies in the spring roiled financial markets. But Wall Street has been relatively stable in recent weeks, with stocks steadily rising to record levels That suggests the market has mostly adjusted to the unpredictability of Trump’s rapidly shifting tariffs. Some market watchers, however, aren’t so sure.
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,” Paul Ashworth, chief North America economist at Capital Economics, wrote Friday. “We are not so sure.”
Despite the uncertainty around tariffs, Wall Street has already come to accept a “base case” of 10% tariffs across the board, said Eric Teal, chief investment officer at Comerica Wealth Management.
Source link
