Wall Street ended lower on Friday as renewed trade tensions weighed on sentiment, after President Donald Trump on Thursday abruptly announced a 35% tariff on Canadian imports, effective from August 1, after criticising Canada’s retaliatory measures.
The Dow Jones Industrial Average tumbled 279.1 points, or 0.6%, to close at 44,371.5. The S&P 500 dropped 20.7 points, or 0.3%, to 6,259.7, and the Nasdaq Composite slipped 45.1 points, or 0.2%, to 20,585.5.
“Instead of working with the United States, Canada retaliated with its own Tariffs,” Trump wrote in a letter to Canadian Prime Minister Mark Carney, posted on his Truth Social platform.
Thursday's upbeat market session, which saw the S&P gain 0.3% and the Nasdaq rise 0.1%, had largely ignored the administration's earlier moves to impose 50% tariffs on copper imports and Brazilian goods.
However, Friday's tone shifted as investors braced for further trade announcements. No update on tariffs targeting the European Union came during trading hours, but over the weekend Trump revealed new tariff plans in letters posted online, directed at European Commission President Ursula von der Leyen and Mexican President Claudia Sheinbaum.
“Mexico has been helping me secure the border, BUT, what Mexico has done, is not enough,” Trump wrote to Sheinbaum.
Addressing the EU, Trump stated that no tariffs would be imposed if member states or European companies move manufacturing to the U.S. “If the EU or Mexico retaliates with higher tariffs,” he added, “then, whatever the number you choose to raise them by, will be added on to the 30% that we charge.”
The cumulative effect of these developments drove all three major U.S. indices into negative territory for the week. The Dow posted a weekly loss of 1%, while the S&P 500 and Nasdaq registered declines of 0.3% and 0.1%, respectively.
Looking ahead, market participants will turn their attention to the start of the second-quarter earnings season next week, as well as a closely watched batch of inflation data that could further shape expectations for interest rates and economic policy.
On the bond markets, yields rose in tandem with inflation expectations and geopolitical risk. The 10-year Treasury yield climbed 1.5% to 4.417%, while the 2-year yield rose 0.5% to 3.893%.
