Stocks experienced a decline on Friday, following the S&P 500’s achievement of a new record high and President Donald Trump’s announcement of a 35% tariff on Canada, coupled with threats of increased tariffs overall.
The Dow Jones Industrial Average experienced a decline of 279.13 points, representing a decrease of 0.63%, ultimately closing at 44,371.51. The S&P 500 experienced a decline of 0.33%, concluding at 6,259.75, while the Nasdaq Composite finished the day down 0.22% at 20,585.53. Friday’s declines, prompted by a heightened trade conflict, followed a session on Thursday in which all three major indices experienced gains.
Following the market’s closure on Thursday, Trump pointed to fentanyl as a justification for increased duties on Canada, indicating that these duties would escalate should the country respond with retaliation. “If Canada collaborates with me to halt the influx of Fentanyl, we may, at some point, contemplate a modification to this letter,” Trump stated in a letter shared on Truth Social. Trump subsequently informed NBC News of his intention to impose blanket tariffs ranging from 15% to 20% on additional countries, surpassing the existing 10% standard that had become familiar to investors. “I believe the tariffs have garnered a positive reception. “The stock market hit a new high today,” Trump told NBC News on Thursday.
The S&P increased by 0.3% on Thursday, achieving a new record, while the tech-centric Nasdaq rose by 0.1%. Investors appeared to dismiss concerns regarding recent trade developments, which included a 50% U.S. tariff on imported copper and a similar tariff on Brazil announced this week.
On Friday, traders anticipated an update from Trump regarding the European Union tariffs; however, no information was provided during market hours. The uncertainty surrounding the president’s communication strategy remains, as it is unclear whether he will issue a letter detailing a new rate akin to his approach with Canada or merely provide an update on the status of ongoing negotiations. Friday’s declines resulted in the primary indices closing lower for the week. The Dow Jones Industrial Average concluded the week with a decline of 1%, whereas the S&P and Nasdaq recorded losses of 0.3% and 0.1%, respectively.
“This has been a week thus far where the increasing discourse surrounding trade did not negatively impact markets. Investors managed to navigate that situation to some degree; however, the scale of the developments involving one of our key trade partners, which emerged unexpectedly, was indeed a revelation,” stated Art Hogan, chief market strategist at B. Riley Wealth Management. In the upcoming week, market participants will face the commencement of the second-quarter earnings reporting season, coinciding with the publication of significant inflation metrics.