U.S. markets ended lower on Friday, with the S&P 500 logging a weekly decline amid growing concerns over a renewed global trade war. Investor sentiment soured following President Donald Trump’s announcement of a 35% tariff on Canadian imports, set to take effect on August 1.
At the close of trading, the Dow Jones Industrial Average fell 279 points (0.6%), the S&P 500 declined 0.4%, and the NASDAQ Composite slipped 0.2%.
Trump Unveils 35% Tariff on Canada, Escalating Trade Tensions
The S&P 500 and NASDAQ retreated from record highs after Trump released a letter outlining new tariffs targeting Canadian goods. The move, part of a broader tariff strategy, aims to pressure Canada to curb the flow of fentanyl into the United States.
The President also accused Canada of engaging in unfair trade practices, citing steep existing tariffs on American companies and sectors.
Throughout the week, the White House issued similar tariff notifications: 25% duties on imports from South Korea and Japan, and a 50% tariff on Brazilian goods. Brazil responded with a warning that it would retaliate if the U.S. proceeds with the planned duties.
Trump also mentioned that the European Union may receive a tariff notice as early as Friday, casting further uncertainty over the state of ongoing trade negotiations.
Major Banks to Launch Q2 Earnings Season
Next week marks the start of second-quarter earnings season, with major financial institutions set to report results. Among those scheduled for Tuesday are JPMorgan Chase (JPM), Wells Fargo (WFC), Citigroup (C), and Bank of New York Mellon (BK).
In corporate news, Levi Strauss (LEVI) saw its shares rise after boosting its sales outlook, saying it expects to absorb some of the near-term tariff-related costs.
Meanwhile, PENN Entertainment (PENN) dropped over 7% amid concerns about slowing growth, following disappointing gaming revenue figures from Iowa and Indiana.
Focus Shifts to Upcoming Inflation Report
With few economic releases on Friday, attention is turning to next week’s June Consumer Price Index (CPI) report, which is expected to show a 0.3% monthly increase.
Minutes from the Federal Reserve’s June meeting revealed only limited support for cutting interest rates this month. Most officials expressed concern about potential inflationary pressures from the new wave of tariffs.
Fed funds futures now suggest a low probability of a rate cut in July, but expectations for a rate reduction in September remain high.
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