Stocks fell lower Friday, pulling major averages into the red for the week, as President Donald Trump announced a surprise 35% tariff on imports from Canada and threatened higher universal tariffs on most trading partners.
The Dow Jones Industrial Average
Trump late Thursday raised Canada's effective tariff rate to 35% starting Aug. 1, claiming in a letter to Prime Minister Mark Carney posted on his social media platform Truth Social that the new rate was due to Canada issuing its own tariffs "instead of working with the United States."
The president also attributed the increased levy to fentanyl, one of key issues raised by the Trump administration in negotiations between its neighbors Canada and Mexico, writing that "if Canada works with me to stop the slow of Fentanyl, we will, perhaps, consider an adjustment to this letter."
In a response posted on X, Carney said that "Canada has made vital progress to stop the scourge of fentanyl in North America" and that the country is "committed to continuing to work with the United States to save lives and protect communities in both our countries."
Separately, Trump told NBC News on Thursday that he plans to issue baseline tariffs of 15% to 20% on most countries, nearly doubling the current blankey rate of 10% set earlier this year. Trump has published letters to over 20 countries this week establishing new tariffs rates, including 50% tariffs on Brazil and copper imports and 25% duties on goods from Japan and South Korea.
"I think the tariffs have been very well-received," Trump told NBC News' "Meet the Press" moderator Kristen Welker on Thursday. "The stock market hit a new high today."
Trump was referring to both the S&P 500 and Nasdaq's record gains on Thursday as investors shook off initial trade policy jitters on bets that Wall Street's strength will continue throughout the second half of the year. However, those concerns took hold on Friday, pulling the S&P and Nasdaq down 0.3% and 0.1%, respectively, for the week, while the Dow Jones lost 1%.
Next week ushers in the start of the second-quarter earnings season, with major companies such as Netflix
Key inflation reports including June's consumer price index and producer price index readings are also slated for release next week, as well as last month's U.S. retail sales and July's preliminary consumer sentiment reading. Much of this data is some of the last economic reports the Federal Reserve will view before its upcoming policy-setting meeting July 29-30.
"The positive technical backdrop and constructive breadth support a 'glass half-full' outlook for the second half of the year," Piper Sandler wrote in a Friday note. "Volatility may increase as earnings season begins (the VIX is trending lower); however, with next week's inflation data looming, the trends continue to point higher for equity markets until the technical evidence shows otherwise."
- S&P and Nasdsq notch a new record
- Friday's losses pushed the major average into the red for the week. the Dow Jones Industriela Average pace to end the week with a 1.1% decline
- while the S&P500 and Nadsaq track losses of 0.5% and 0.2%.
- Second quarter earnings season next week and the relase of key inflaton data.
- “The positive technical backdrop and constructive breadth support a ‘glass half-full’ outlook for the second half of the year
- ” Piper Sandler wrote in a Friday note. “Volatility may increase as earnings season begins (the VIX is trending lower); however
- with next week’s inflation data looming
- the trends continue to point higher for equity markets until the technical evidence shows otherwise.”
