By Caroline Valetkevitch and Chibuike Oguh
NEW YORK (Reuters) -Major stock indexes were slightly lower on Friday as U.S. President Donald Trump’s announcement of tariffs on imports from Canada fanned worries about trade tensions, with the Canadian dollar down against the greenback.
Investors are also bracing for an announcement from Trump of tariffs on the European Union, a move that will likely trigger a tit-for-tat response from the bloc and inject fresh market uncertainty.
Trump said late on Thursday the U.S. would impose a 35% tariff on Canadian imports next month and planned to impose blanket tariffs of 15% or 20% on most other trading partners.
Aside from in the currency markets, reactions to the tariff news have been milder than in April, when Trump launched his trade war. But that may change if more progress isn’t made on the tariff front soon, said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma.
“I don’t think the market can take the forever Trump tariffs on repeat. It’s been remarkable the market has been so resilient in the face of the tariffs, and all of the changing rules, changing rates, and the pauses, delays, extensions and surprises,” he said.
“The market may have another tariff meltdown much like April if we don’t get more results.”
Still, he said, stocks could benefit from second-quarter earnings reports, which begin next week.
The Dow Jones Industrial Average fell 281.88 points, or 0.63%, to 44,368.76, the S&P 500 fell 15.03 points, or 0.24%, to 6,265.43 and the Nasdaq Composite rose 7.47 points, or 0.04%, to 20,638.13.
Shares of Nvidia climbed over 1% to a record high, extending the AI chipmaker’s stock market value to $4.05 trillion.
Drone makers AeroVironment and Kratos Defense & Security Solutions jumped about 11% after U.S. Defense Secretary Pete Hegseth ordered a surge in drone production and deployment.
MSCI’s gauge of stocks across the globe fell 3.03 points, or 0.33%, to 923.19. The pan-European STOXX 600 index ended down 1.01%.
“Today, you’re seeing a little bit of a pullback because of the tariffs being announced overnight. It’s been three consecutive days of after-market tariff announcements, and they seem to be coming relatively randomly, so you don’t know what you’re going to get. There’s a bit of that nervousness that might be dampening the excitement today,” said Wasif Latif, chief investment officer at Sarmaya Partners in New Jersey.
The Canadian dollar weakened 0.14% versus the greenback to C$1.37 per dollar.
The dollar index, which measures the greenback against a basket of currencies including the yen and the euro,
rose 0.26% to 97.84. The euro was down 0.09% at $1.1689.
Bitcoin gained 3.58% to $117,652.50, hitting another record high. Crypto investors are betting that policy wins for the industry, expected next week, could invite new investment in the asset class.
Earlier in the week, Trump pushed back his tariff deadline of July 9 to August 1 for many trading partners to allow more time for negotiations, but broadened his trade war, setting new rates for a number of countries, including allies Japan and South Korea, along with a 50% tariff on copper.
Copper prices slipped on Friday, with three-month copper on the London Metal Exchange 0.4% weaker at $9,664 per metric ton.
Spot gold rose 1% to $3,355.89 an ounce, as investors rushed toward safe-haven assets amid the trade tensions.
U.S. Treasury yields rose as investors focused on next week’s consumer price inflation report that may show that price growth accelerated in June, with the Federal Reserve expected to keep interest rates on hold as it waits to see the impact of tariffs on price pressures.
The yield on benchmark U.S. 10-year notes rose 7.3 basis points to 4.419%, from 4.346% late on Thursday.
(Reporting by Caroline Valetkevitch; additional reporting by Chibuike Oguh in New York and Amanda Cooper in London; Editing by Saad Sayeed, Mark Potter, Rod Nickel and Daniel Wallis)
