US Stocks Fall After Trump Threatens Tariff on Canada
The US stocks fell mainly on Friday, after President Donald Trump threatened a 35% tariff on Canada – a sharp escalation in a continuing trade war. The Dow was 226 points or 0.5% lower. The wider S&P 500 fell by 0.28% and the technical driving Nasdaq composite was flat.
Market Reaction
The equity futures fell back on Thursday evening after Trump announced the 35% tariff for Canada, which will be effective on August 1st. The S&P 500 was on the right track to achieve two days with profits. The global stock markets had largely twitched Trump’s tariff threats this week. The S&P 500 and Nasdaq closed at Record Highs on Thursday, although Trump announced a 50% tariff in Brazil the day before.
Investor Uncertainty
With stocks with record highs and trade uncertainties that are present, investors are divided whether markets are a matter of course or there is space to drive up higher. Trump said on Thursday in an interview with NBC News that tariffs for other US trading partners could also increase higher, citing the strength of the stock market. "I think the tariffs were very well received," he said. "The stock market has reached a new high today."
Analyst Insights
In a note, Steve Sosnick, chief strategist at Interactive Brokers, investors are increasingly nonchalant with regard to Trump’s tariff threats. It is not yet possible to see whether it is a profitable as a profitable or can prepare for the loss whether it is the acceptance of the "Taco trade". "The Blasé posture is again based on the perception of the dealers that tariff discussions remain flexible," said Sosnick. "Heck, dealers have made a lot of money to bet on the formability of the tariff – why should you reverse the course now?"
Tariff Impact
The announcement of a 35% tariff in Canada sent the shares lower, although the losses were relatively contained compared to the turbulence tariff from March and April. It is unclear whether the new tariffs would apply to all Canadian goods. An administrative officer said that the expectation is that imports that the United States are currently at 25% would increase to 35% that those who are released from free trade in the USA-Mexico Canada would continue to be excluded.
Market Outlook
The stock and bond markets hardly reacted to the recent headlines for tariffs. The prevailing view is that things at some point regulate at an appropriate level, some business is sealed and this negotiation round can be ignored because they will not be disturbing. For investors, too, other factors have also focused on the focus, including the start of the winning season for the second quarter. The economic data has also been relatively strong in recent months, which contributed to supporting the market rally.
Investor Sentiment
"Our view remains that tariffs cause short -term uncertainty and volatility, but should only have limited effects in the medium term," said Mohit Kumar, chief economist and strategist for Europe near Jefferies. However, other investors linger that a hit of economic growth and business is affected. "The markets should not reject Trump’s recent statements and that the next actual tariffs will probably increase," said Sarah Bianchi, Senior Managing Director at Evercore Isi, in a note.
Market Drivers
The S&P 500 and Nasdaq, despite new threats of tariffs, have risen from companies like Nvidia that have increased in order to grasp the highest levels. NVIDIA won 0.75% on Thursday to reach a record and to switch over 4 trillion dollars to market value, which was the first listed company that reached this milestone. Nvidia won 1.9% on Friday, met a new intraday record and expanded these profits.
Volatility
The fear knives of Wall Street, the CBOE Volatility Index, has also dropped considerably since April because the markets have accepted relative calm. The VIX acted around 16 points on Friday, compared to the trade over 50 points in early April. According to Adam Turnquist, chief -technical strategist at LPL Financial, the market profits of AI and Tech shares were driven.
Bitcoin Surge
Bitcoin rose over 118,000 US dollars on Friday and made past records. Bitcoin has increased by more than 8% in the past seven days and has increased by almost 25% this year. The world’s largest cryptocurrency according to the market value has cited new records because investors have taken a risk setting. According to CNN’s fear and greed index, "Extreme Gier" or "Greed" drove the markets this week.
Conclusion
Despite the flood of the outstanding negotiations, the US farming remains unchanged: Protectionism is a policy, no attitude. In short, the letters may have bought time, but they have also invested the uncertainty again. The tariff saga is far from over for global markets and political decision -makers.
